NOS Energy Connects Interactive Video With Sales

NOS Energy drink produced an interactive short film that allows the online viewer to take the part of the main character and choose an adventure, starting on how to get to work after waking up late.  The films continues with numerous ads for NOS Energy, and each film ending with two options on which direction to proceed in.  The intriguing part is how well the interactive video translates into sales.  Each part of the interactive film has a clickable link that pops up, offering the viewer to a chance to print a $0.49 coupon for a 650 NOS Energy drink.  The coupon image was posted a few days ago on the BevWire twitter account, so readers may have found out and gotten a chance to take advantage of this deal.

David Pullara, Coca-Cola’s senior brand manager strategy and architecture manager on the energy portfolio says,

“We thought the idea of putting the NOS drink fans in charge of their own adventure was a great, powerful idea.  We know empowerment is a big deal to our fans, they want to know they are in control.”

However, in going through the steps of the interactive video, I hardly felt in control of my own adventure.  Each video differentiates in length, but the “right” videos tend to be longer (1+min in length) while the “wrong” videos tend to be shorter (30-45 seconds).  If you clicked on a video that they did not agree with, it would show you some quick content but the ending would show that you clicked on the wrong link and would tell you to re-select.  Ultimately, this video made me feel like I was being led down a path to see what they wanted to show me – I am not as “in control” as they say.

In any case, the interactive video is a great idea, departing from the energy drink’s more traditional marketing maneuvers.  Anything that compels the viewer/shopper to make a decision increases their commitment to the video and ultimately the product.  Meanwhile, inserting a printable coupon is a great idea to connect online with offline, ensuring that the emotional appeal is kept a high level, ending with the viewer consuming a NOS Energy drink themselves.

The clickable coupons are also intriguing because it gives NOS Energy a direct and quick measure of the campaign’s effectiveness on so many levels.  While youtube views can be counted to see how many times each video was watched, the coupon indicates how many viewers actually choose to take advantage of this offer.  And when they ultimately receive all the printed coupons back from Mac’s Convenience, they will see how many coupons were actually redeemed – meaning how many viewers actually were converted into customers.

While I may represent a small percentage of the beverage consumer, my personal experience indicates that this marketing campaign was a success.  I followed through the entire interactive video and bought a NOS Energy for $0.49.  For those that saw the video and ensuing coupon, it would seem like a no-brainer to go and pick up a 650ml NOS Energy since the coupon was a steep 86% discount from the regular price. NOS Energy did not cheap out either, since they could easily have lessened the discount or even switched the trial product to the 473ml can and not the 650ml bottle.  What the manufacturer realized is that this was an interactive brand experience, where the video showed a 650ml bottle so the ultimate offering to the consumer should be the 650ml bottle and not a 473ml aluminum can.

However, in my quick conversation with the Mac’s employee shows that I was the first person to come in with a coupon for the NOS product.  This may ultimately indicate that while the interactive video was successful in getting viewers, not enough coupons were redeemed.   Pullara later adds that the intention is to have consumers promote the interactive video and go viral.  My belief is that the video never went viral and momentum was lost.  At the end of the day, a great Canadian marketing campaign that translated some online traffic into actual cases sold; it would just have been more effective if it was publicized more.  The lesson may be that while the video could have gone viral to increase viewership and coupon redemption, some more publicity and media support could have been provided to make this a true success.

Coca-Cola Freestyle – Full Steam Ahead

Coca-Cola Freestyle - courtesy of timeoutchicago.com

Coca-Cola had already launched their 125 flavor fountain machine three years ago in some US test markets.  Named “Freestyle”, this fountain unit stores up to 125 flavors of soda, juice, sports drinks, and flavored waters – and sends consumption information directly back to Coca-Cola headquarters.  Data analysts at the headquarters can then tell you which flavors are most popular at each location, at a specific time of the day, and see which flavors are mixed together most often.  Ad Age’s Natalie Zmuda has more information on this machine and its success in the test market as well as some upcoming advertising media support for the unit (link here).

However, I’m more interested to see what the market impact of this fountain machine will be.  Will this fountain unit show up in all quick service restaurants?  As is the case in a duopoly type of industry, will the other competitor (Pepsi) react or do anything?  Since this machine is so successful in the United States, will this be launched worldwide; or to quench my curiosity, will this unit make its way to Canada?

Given that the machine stores up to 125 flavors and has been tested in high traffic on-premise (quick service restaurants) locations, its safe to say that it will not appear at your location Joe’s Diner.  With the technology involved for the Freestyle, it’s likely very expensive and the argument to have it at a local restaurant that may not sustain high trafic levels will come by quite often.  Coca-Cola would like to launch this machine across the United States so they can mine data on consumers in every state to find out how their consumption habits differ, so if the traffic levels justify having a Freestyle fountain unit, they will undoubtedly install one there. 

Will Pepsi react to Coca-Cola?  The restaurant channel for both Coca-Cola and Pepsi are enormous, and with Zmuda’s Beverage Digest statistics indicating that Coca-Cola (70%) and Pepsi (19%) market shares for this channel so far apart, it’s very likely that Pepsi will react and strike back.  If the technology is not patented by Coca-Cola, Pepsi may try to develop a fountain unit that holds numerous beverage flavors as well.  If the technology itself is patented and there’s no workaround, then Pepsi will explore some other options to gain market share in this channel.  During the time that Pepsi lost the No.2 cola position to Diet Coke, Pepsi had been actively promoting their Pepsi Refresh project, as well as other beverages in their portfolio like Pepsi Max.  By focusing efforts on Pepsi-cola and specifically on fountain, Pepsi may be able to re-gain some lost momentum. 

However, at the end of the day, the most profitable channels for beverages involves bottles so losing in fountain does not mean you lose overall.  If Pepsi were to gain strong market share in the convenience, grocery supermarket and drug store channels then losing in the restaurant may not seem as important (less important overall but not as important – restaurant market share is a component to their overall market share).

As to whether the Freestyle will make its way up north or elsewhere, it seems like a distant possibility.  Again working on the belief that Coca-Cola would like to understand how consumption habits differ from state to state, it is also important to understand these habits country by country.  The insights from understanding how consumers may choose some flavors more often than others may enable Coca-Cola to save money on launching future beverage offerings (ie. Cherry Coke Zero, Raspberry Nestea, etc).  My belief is that once the Freestyle has gained enough publicity and momentum in the United States, other countries will start asking for this machine and support.  And since Canada is similar to the United States in demographics and geography, this makes Canada a very likely second country to implement the Freestyle.

For the readers that are in the United States where the Freestyle machine is tested, have you seen the Freestyle?  If you have, please leave a comment on which flavors you’ve mixed together. 🙂

Coca-Cola Follows Coors, Launches Color-Changing Cans

 

Coca-Cola 2011 Summer Set

Coca-Cola constantly refreshes its packaging so when summer 2011 came around, it was likely that they would have some fancy packaging.  However, what is different about this packaging refresh is that is also contains a “summer ready” indicator, as Coca-Cola has termed it.  What this means is that the can has portion that will change color when it reaches a certain temperature, indicating that it is cold enough and ready for consumption – similar to the Coors Light beer cans.  Using thermochromic inking technology, a small white Coca-Cola contour silhouette will turn to red when the can’s temperature reaches 8 degrees Celsius.

From Denis Ferlatte, Coca-Cola brand Marketing Manager in Quebec,

“The summer season is very important for both the soft drink and beer industries. We need to stand out and innovate to grab consumers’ attention and interest. Moreover, summer, with its warm and sunny weather, is the time to focus on the refreshing aspect of our product. So we came up with this new can.”

The cans were available for purchase starting July 1st, and will only be around (running off inventory and change to winter packaging) until September 5th.  In terms of size offerings, it can be found packages of 8, 12, 18, 24, and 32 (basically all pack sizes).

So is this a real innovation, and does it strengthen Coca-Cola branded products?  It can be considered a small step forward, but definitely not a game changer.  This does show that Coca-Cola is paying attention to the consumer by alerting them that a can of Coke is cold enough for “optimal consumption”, and what better time to do this than in the hot and humid summer months?  Also, by using the silhouette Coca-Cola bottle and changing it from white to red, they are reinforcing their trademark bottle shape and colors.  Consumers simply see the advertised bottle and colors, and automatically make the connection to Coca-Cola products.  In my opinion, this does given Coca-Cola branded beverages an edge, but not a lot.  It may drive trial because of its novelty, but it’s always the price and taste that keeps consumers coming back and they would likely have bought the Coca-Cola beverage regardless of the summer ready indication.

On the other hand, their use of thermochromic ink should be expanded.  Coca-Cola should expand the use of this technology to other Coca-Cola can packaging like the Coke Zero (change from white to black silhouette), Diet Coke (white to silver), or Spite (white to green).  Other than the can packaging, they should use this for their 355ml bottle offerings that are found in certain on-premise establishments like hotels or high-end restaurants.  Consumers have always preferred drinking Coca-Cola (or carbonated beverages, in general) out of glass bottles based on the taste and chill factor – so putting a summer ready indicator will go a long way to reinforcing their leadership and showing that they pay attention to consumer preference.

Will Pepsi follow and add a thermochromic ink stripe?  Given Pepsi’s competitive nature they will likely be adding this technology to their products very soon (maybe next summer).  Pepsi has followed Coca-Cola and re-introduced their 414ml bottle size this summer, so it’s not out of the question that they follow with new color changing ink packaging next year. 

And since Coca-Cola only has it on their core product, I would suggest Pepsi to take this technology and expand its uses to include other products in their portfolio.  And if it’s not too costly, they should take the lead and re-introduce some glass bottles with this thermochromic ink.

Honest Tea’s Social Experiment – Are Americans Honest?

Over the last few weeks, U.S. cities have been running a live social experiment on the subject of honesty.  Honest Tea (and for this social experiment the word play of “Honesty”) has set up unmanned “tea booths” across cities including Boston, Chicago, Miami, Washington D.C., Philadelphia, Dallas, New York, and Los Angeles where consumers can pick up a bottle of Honest Tea by donating $1 into a plastic box.  There is supposedly a camera watching the unmanned tea booth, but no one would be there to stop the consumer from stealing a bottle if they decided to not pay (or slip in an IOU note, monopoly money, or put in $1 and take 3 bottles, etc).  So far the results (posted on the microsite www.TheNationalHonestyIndex.com) indicate that Boston citizens (99%) are the most honest while New York citizens (87%) are least honest.  The site also provide a camera link for each city the experiment is run, so you can watch to see if people are putting in a dollar when they grab a bottle.

The marketing campaign appears to be successful so far, with strong social integration and media impressions.    Social aspects include the ability to tune in on-line to the city of your choice, choosing the foundation that all the donations will go to, and the usual twitter/facebook/google+/e-mail/etc.

The campaign is sure to generate a lot of goodwill for Honest Tea, but will it bring in sales for the beverage, especially after the campaign and tea season (summer) ends?  So far, the translation to their bottom line is positive – almost all cities are seeing sales growth, ranging from strong double digit sales growth to modest single digits in others.  Depending on how long the campaign is run for, I might be able to watch this live in Boston or San Francisco when I make a visit later in the month.

Whether Honest Tea will carve out a stronghold in the category against larger manufacturers like Lipton, Nestea, or AriZona is a question for another day.  Though for a smaller player in the category, this is something that will certainly catch attention, generate buzz, and show that you understand how to reach your target market.

New “Trim” Can Coming Amid Stronger School Beverage Guidelines

Ball 250ml Can - courtesy of Ball.com

Ball Corporation, a supplier for beverage cans and bottles, says they have manufactured a new smaller beverage 8oz can package.  This new size is slightly smaller than their 8.4oz (250ml) can (popularly used by Red Bull), and will still store up to 8oz (237ml) of liquid.  For production purposes, this new can will not need refitted or modified lines as it will use the same production line as the current 8.4 oz cans.

So why is this important?  Apparently, the ABA (American Beverage Association) passed new restrictions to limit the serving sizes of beverages in schools to 8 ounces.  Similar to how Canada has school guidelines on beverage serving sizes, American schools have now established guidelines for their elementary, middle, and high schools.  These organizations both have similar restrictions set up, allowing certain sizes for milk, juices and water and prohibiting the sale of other caloric beverages like soft drinks, energy drinks and sports drinks.  With this new size, beverage manufacturers will be able to enter elementary schools with their juices in the new smaller-sized container.  Robert M. Miles, VP Sales for Ball’s metal beverage packaging division for the Americas, comments, “Ball’s 8-oz. trim can is a sustainable solution for customers looking to stand out in the marketplace and tap into incremental distribution channels.”

With Miles’ comment, does this mean that there will be more competition for selling healthy beverages in schools?  In Toronto Canada, this has already happened.  The Toronto School Board has voted to give an exclusive vendor contract to a company called HealthVendCanada (HVC).  HVC will sell water, milk and juices in Toronto schools that meets the new guidelines.  Selling points to the school board was HVC’s variety of 60 different beverages (compared to 12 of Coca-Cola and Pepsi), their milk offerings, and agreement to sell water for $1 (compared to $1.50).  With the increased focus on health standards, HVC was able to move quickly and meet these guidelines before Coca-Cola or Pepsi, gaining exclusivity in schools for at least the next two years.  Even if the two companies were able to meet the guidelines, their beverage portfolio may put them at a disadvantage compared to smaller suppliers given their limited offerings.

Another thing to consider: why did the guideline regulate a package size but not on the package itself (aluminum cans vs. plastic bottles)?  Though aluminum cans are faster chilling, they are not nearly as durable as plastic bottles nor resealable.  In order to get an answer, I e-mailed the ABA to find an answer.  Their response was the following:

“Our industry guidelines uses a variety of packaging types – including PET, aluminum and glass – all of which are good options for bringing beverages to market.   However, these guidelines do not address packaging type.  “

 What this means is that while they regulate the serving sizes, the containers they come in are not a concern.  Undoubtedly, because production lines do not have to refitted and material costs for can packaging may be lower, aluminum cans were the choice among manufacturers.

In the end, the main concern is the serving size of healthy beverage options, as well as limiting the unhealthy beverage alternatives in a school environment, which the ABA and Refreshments Canada has successfully achieved.  Ball Corporation, the maker of the trim can, stands to benefit greatly with their packaging innovation regardless of which manufacturer supplies the school with the refreshments.