Consumer-Products Companies' Next Big Move

From General Mills (NYSE: GIS  ) to Gap (NYSE: GPS  ) , companies that sell to consumers stepped up their ad spending in 2009. For certain players, however, identifying suitable marketing opportunities has become a challenge. That's precisely why two industry giants are making a movie.

That's right, according to The Wall Street Journal, Wal-Mart Stores (NYSE: WMT  ) and Procter & Gamble (NYSE: PG  ) have teamed up to produce a family-oriented made-for-TV movie. While Internet-based advertising continues to capture a greater share of ad dollars, TV programming remains a key platform for connecting with consumers.

The problem, according to company executives, is that "traditional" programming has been edged out by an increasingly daring lineup of shows, many of which taint brand image. Quoted in WSJ, a P&G executive explained, "You have heard the saying 'You are judged by the company you keep.' Brands are judged by the company they keep." From where I sit, Wal-Mart and P&G excel as corporate brands when consumers view the companies as partners in their daily efforts to nurture and provide for their families. That's a tough message to put across when company ads are sandwiched between television sex and violence.

Moreover, while the Internet is a great platform for interactively connecting with shoppers, it may not be the best arena for building that all-important emotional bond between consumers and products. I'd argue that moms and dads often turn to the web to escape feelings of family responsibility -- or to intelligently (and unemotionally) research product price and functionality. All of which means that if P&G is to make purchasing an item such as Tide feel synonymous with good parenting and family values, it's got to touch consumers when they're vulnerable, i.e., during those wholesome TV moments.   

That shouldn’t be a problem during "Secrets of the Mountain," the two-hour family-friendly flick scheduled to air on General Electric's (NYSE: GE  ) NBC in April. Although P&G appears to have shouldered the bulk of production and airtime costs, both its own and Wal-Mart's ads will run during commercial breaks. And the movie itself will be popping with product placement -- a counterattack on recording technology that allows consumers to ixnay commercials.

Wal-Mart and P&G aren’t alone, either. Dozens of big-time marketers have long shared their programming complaints. As for going Hollywood, other consumer companies are making the same move, on an even bigger scale. Toymaker Hasbro (NYSE: HAS  ) , for instance, has partnered with Discovery Communications (Nasdaq: DISCA  ) to launch a TV network and website that will essentially run as one long commercial for Hasbro products -- under the guise of educational kids' programming, of course. 

With chastened consumers refusing to pay up for anything but the best deal, companies are relying on advertising to communicate the value proposition of both new and established products. Yet for large companies in crowded industries -- P&G, for instance -- smart ad spending might at most return business back to prerecession levels. Smaller niche companies making bolder moves, however, are likely to enjoy more incremental upside.

Shareholders in both camps should -- may I say it? -- stay tuned.

More ad-related Foolishness:

Wal-Mart is a Motley Fool Inside Value pick. Hasbro is a Stock Advisor selection. Procter & Gamble is an Income Investor pick. The Fool owns shares of Hasbro and Procter & Gamble..Try any of our Foolish newsletters, free for 30 days.

Fool contributor Mike Pienciak holds no financial interest in any company mentioned in this article. The Fool has a disclosure policy.


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  • Report this Comment On February 22, 2010, at 5:18 PM, 98analysis wrote:

    It seems consumer-products companies need to put in double the efforts. It used to be they can rub off on the positive feelings generated from family-friendly shows.

    Now, they need to

    (1) first combat the negative feelings generated by sex-violence shows, and

    (2) then introduce their family-friendly message.

    I would expect these companies invest a lot of resources as they carry out this up-hill campaign.

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