Risque or Just Risky? 3 Companies Whose Ads are Over the Top

Handsome guys ringing bells to the tune of "Jingle Bells." Hunky firemen playing with kittens. A shirtless chef cooking with salad dressing. It all sounds so innocent, but ads from KMart promoting products from Sears Holdings (NASDAQ: SHLD  ) , as well as ads for Beam (NYSE: BEAM  ) and Kraft Foods Group (NASDAQ: KRFT  ) , have aroused some consumers' ire.

Shaking their...what!?
KMart's Facebook page is ablaze with indignation over a recent Joe Boxer ad where handsome guys wearing boxers shake their hips as they ring jingle bells. The following snippet is fairly representative of the all-caps fury, as well as KMart's response.

 

Source: KMart facebook page

The fury hasn't dampened the ad's popularity. The "Show Your Joe" YouTube Video has already gotten over 11 million views.

This isn't the first time KMart has gone edgy. Earlier this year the retailer ran an ad called "Ship My Pants" to promote its KMart.com ship to store free shipping. These ads prompted the One Million Moms group to campaign for the company to pull the ad. 

How zesty do you want it?

Source: getmezesty.com

Kraft Foods Group (no relation to me) received similar One Million Moms blowback for its "Let's Get Zesty" campaign to promote Zesty Italian dressing as a marinade. Warning for the demure: this is pretty steamy stuff. 

A Kraft spokesperson told AdWeek," [the ads are] targeted toward our salad dressings consumer, who we define as a mainstream foodie. They enjoy cooking and creative expression, and this campaign speaks to them in a way that recognizes she is an individual in addition to being a mom." Who knew I'm their target customer? You had me at "Let's Get Zesty."

Oops, there he is again
Liquor company Beam ran a very racy series of YouTube videos for its Sauza tequila last year featuring a fireman and a kitten, but had to rush to film a new lifeguard and puppy series this year after Kraft's Zesty ads debuted using the same beefcake actor.

Source: Sauza YouTube channel

Despite the familiar face fiasco, the Sauza fireman campaign was number 15 of the 20 most watched YouTube videos of 2012.At November's Morgan Stanley Global Consumer and Retail Conference, Beam reported 35% ad spend on digital marketing to make it a social media leader in its industry. 

What's the big deal?
So how do these ads affect investors? Sears shareholders should be less upset about racy ads than the company's performance. The company just reported third quarter earnings on Nov. 21 and net losses were worse than expected, reaching $534 million. KMart saw a 2.1% decline in same store sales, with only the apparel and outdoor living segments seeing improvement. Therefore anything to get shoppers in the stores should be applauded. 

In October 2012 Kraft spun off Mondelez International .Kraft kept the stable domestic food business.  Since the split Kraft seems invigorated with more edgy ad campaigns, new products, and a new CEO. Shares are up 16.97% over the last year.. 

American liquor company Beam has a major rival in Diageo, yet surprisingly it has outperformed Diageo over the last four years. That is probably due to Beam's intense focus on a female target audience. These humorous/saucy ads teaching them how to fix Sauza tequila margaritas are just part of that effort to woo women. Beam also caters to the ladies with its very popular Bethenny Frankel Skinnygirl cocktails for its Global Spirits line. That brand is listed as one of their high margin, high growth Rising Stars. And then there's Beam's Pinnacle Vodkas featuring sweet flavors like Rainbow Sherbet and Strawberry Shortcake, among 27 others. Pinnacle is considered one of Beam's top Power Brands.

Enjoy risque, don't buy risky
If you've read this far, ladies, grab yourself a cold Skinnygirl and check out the ad links. Enjoy the risque Joe Boxer ad but don't be tempted to buy risky Sears Holdings' stock. Instead, consider some Beam for growth or Kraft Foods for value.

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