Agency focuses on one of few rising ad segments
An electrical fire in February 2004 nearly wiped out Mars Advertising Inc.
The blaze swept through the company’s Southfield headquarters, destroying just about everything.
Fortunately, no one was hurt and the agency had files backed up elsewhere, but Mars was faced with the prospect of regrouping and rebuilding.
“We called it the divining moment for us,” CEO Ken Barnett said. “It allowed us to get sharp and focused.”
Today, the agency is twice as big and is thriving despite a different kind of fire, one that has gutted advertising because of the global economic meltdown.
That’s because Mars, founded in 1973 by Barnett’s mother, Marilyn, specializes in one of the very few growing ad segments: in-store marketing that targets consumers already in the buying mode.
Mars conducts advertising and marketing campaigns inside stores such as Wal-Mart, Art Van, Sears and Best Buy, and does work for brands that include Little Caesars Pizza, Coca-Cola and Mattel.
“It would be our job to help the mattress manufacturer we support to convince the consumer to buy that particular mattress at that retailer,” Barnett said.
Nearly $21 billion was spent on in-store marketing in the U.S. last year, up around 2.5 percent from 2007, according to statistics reported by the Wall Street Journal.
Overall U.S. advertising fell last year by 3.2 percent to $270 billion, according to Advertising Age, and 2009 spending is expected to decline another 4.5 percent to $258 billion.
Mars improved to No. 169 from No. 175 in Advertising Age’s annual snapshot of all U.S. ad and marketing agencies by revenue. The firm had nearly 11 percent revenue growth to $33.3 million last year over 2007, the magazine said.
Mars ranked as the 14th largest advertising and marketing firm in metro Detroit by revenue in Crain’s 2009 Book of Lists.
“That’s a function of us being in the right space and having the right people,” Barnett said. The company employs about 500 people, up from 350 at the time of the fire.
Today, Mars has network offices in nine cities and plans to expand in Asia, the United Kingdom and Central and South America. The agency opened its first international office, in Toronto, in February 2008.
“There are a lot of inquiries coming from other countries,” Barnett said. “The retail environment is incredibly different overseas.”
The agency is also looking for cooperation agreements with other companies.
Mars and New York-based ad agency Young & Rubicam recently formed what they’re calling a “global strategic alliance” to share resources aimed at boosting in-store retail marketing.
Mars will get access to Y&R’s global network of 184 offices in more than 80 counties, while Y&R can use Mars’ recognized in-store marketing expertise.
The alliance doesn’t involve equity stakes in either company.
Young & Rubicam, owned by London-based advertising holding company WPP, also does business as part of the Dearborn-based Team Detroit, the coalition of advertising agencies whose main client is Ford Motor Co.
“There isn’t a consumer package goods client or retailer we speak with who doesn’t believe the in-store marketing environment isn’t the most critical battleground for share growth and revenue opportunity. Mars understands that world better than most,” said George Rogers, president and CEO of Team Detroit.
New York City-based OgilvyAction and D.L. Ryan Cos. in Connecticut are two of Mars’ rivals when it comes to in-store advertising, but no one locally has made a run at what the agency does.
“No one in Michigan plays in our space,” Barnett said, but agencies elsewhere have seen what Mars does and are looking to grab a bigger share of the in-store pie.
“The competitors are getting a lot better and forcing us to get a lot better in what were doing,” he said.
Why more companies are shifting resources into in-store marketing is “insane,” said Michael Bernacchi, a professor of marketing at the University of Detroit Mercy. It’s the “obvious space” to target consumers.
“You’ll never get anyone closer (than in-store). You have the consumer, you have them in the most productive modality they could ever be, a buy modality,” he said. “When you get down to the consumer, it’s still bite, lick, feel, be there. Anyone who can push consumers along is going to succeed.”
Barnett calls in-store shopper marketing “the intersection of the consumer, the brand and they place where they shop all converge, making the sale more likely.”
The global economic crash actually proved to be something of a boon for Mars because it offered retailers and those who make goods the chance to still reach consumers in the perfect situation: In the store.
“At the same time the market went south, you also had this huge proliferation of communication vehicles and tremendous pressure on price,” Barnett said. “The retailer became more important and more sophisticated in branding.”
The actual work is not just displays and free samples inside stores. Campaigns typically employ multiple media platforms, such as digital, print and broadcast elements, to lure customers to the retailers and the products.
Mars’ efforts are getting industry notice, too.
The agency was recently ranked No. 1 for the second consecutive year in The Hub magazine’s annual survey of shopper marketing agencies, and was first in each of the 10 metrics used by the marketing industry trade publication to calculate its rankings.
The rankings are based on survey results of those who employ the agencies.
====
This story originally appeared in Crain's Detroit Business, a Crain Communications publication.
On June 1, 2009 by Bill Shea
