November 21, 2007
Retailers Leak Ads to Get Word of Deals Out Early
Last month, Brad Olson, the founder of Gottadeal.com, told CNNMoney.com he couldn’t understand why Wal-Mart would threaten to sue him over leaking the company’s ads to the public in advance of their drop date. After all, he reasoned, it was “great publicity for Wal-Mart.”
At the time, Wal-Mart company spokesperson John Simley insisted that the leaks had to stop. He said, “We believe that the unauthorized distribution of [Wal-Mart ads and circulars] is a violation of our legal rights. This needs to be respected.”
Now, as it turns out, Wal-Mart and other retailers that previously took issue with Mr. Olson’s site, Dealtaker.com, Bfads.net and others have changed their mind. The retailers have come to view these sites as points of free advertising and retailers are so interested in getting it that they are leaking news of deals in advance of them hitting the street.
According to a New York Times report, Pacific Sunwear, CompUSA and OshKosh B’Gosh are among those who have leaked news of upcoming deals to the websites.
Pacific Sunwear, for example, had an employee send the retailer’s upcoming Black Friday ad to Bfads.net because it had not been posted earlier this month.
Michael Brim, the founder of Bfads.net, said told The Times that the cooperation his site is receiving from retailers is “definitely a change of pace from a few years ago when they all wanted to file lawsuits against us.”
Ron Defeo, a spokesman for Home Depot, said supplying the sites with upcoming deals makes sense for a couple of reasons. First, the sites are becoming increasingly popular and consumers “are looking for the information.” Secondly, the company assumes the sites will gain possession of and publish the information anyway. “We want to make sure they get the accurate information,” he said.
Back to Wal-Mart… now instead of threatening legal action, the company is sending thank you notes to the early bird websites.
Shannon Doung, associate marketing manager at Walmart.com, wrote to Mr. Brim earlier this month. “I checked out your site today and yesterday and we pulled some traffic reports – great job. Almost over 43,000 clicks just yesterday alone. Thanks for giving us a nice write-up on your front page. Keep up the great work!”
Discussion Questions: What factors do you believe are behind retailers 180 degree change of position on websites that publish sales deals before the official ads come out? Do you see this new and cozier relationship changing when the economy gets better and retailers feel more secure in how business will perform?
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Traditional marketers are only beginning to understand online media. The first reaction, as we saw last year, is suspicion and a proclivity to call in the lawyers. Decades of being able to control the messaging, control the brand and control the timing leaves marketers in a fantasy world: They think they still have control.
But they don’t. Some brands are now largely determined by customer reviews. Messaging must be more nimble, appropriate to the audience and the medium. As for timing? Forget it. Last year’s news reports included data suggesting that online was eating into Black Friday itself, as consumers, presumably waiting for the button to pop up on the bird, logged on and shopped.
The information gets out. All you do when you threaten to sue these sites is create ill will among customers.
Circuit City made a big deal about a deal site I visit frequently, posting the price drop on the Playstation 3 early, a while back.
I can tell you that the posters on that site bash Circuit City every opportunity they get.
As they say, you can’t estimate the value of “free advertising” and the “added value service” associated with giving consumers more time to plan their weekend of shopping…I expect retailers will benefit from this activity over the long term but will need to either extend the hours of “special pricing” or move to a “site to store” shopping system to maximize the revenue opportunity.
Apparently certain retailers got the memo that told them the purpose of advertising: more traffic. Every store needs to know what it costs to get a shopper to show up. This applies to online retailers as well as the bricks and mortar locations. It isn’t unusual to pay $5 to $25 just to find a customer.
Perhaps retailers read the postings on RetailWire on this discussion topic from last year? It was just antiquated thinking that we knew was going to change eventually. This is apparently the year.
Well, I can say this about the retail industry: at least we (unlike the music industry) have learned that you can’t stop consumers from doing what they want to do anyway. Instead of fighting what is inevitable, retailers have changed their position to embrace it. It’s a painful process–instead of the big surprise the week before, everybody has time to counter everybody else’s big move–but ultimately it’s for the best, because consumers will find this info anyway, and if your deals aren’t out there you’ll actually suffer in comparison.
Now if only it were as easy a change in position to embrace cross-channel consumer behavior….
Stay tuned…early ad leaks soon to be Niagara Falls! Retailers have always known this. “Give the consumers what they want!”
Early ad strategy is a campaign science that must be implemented with the greatest of care. Competitive mistakes are extremely costly to the bottom line profit of a product campaign. Manufacturers also have a watchful eye and are depending on a retailer’s keen execution of early ad strategy.
I understand the retailers’ knee jerk reaction of protection but there is a golden opportunity here that needs to be managed properly for optimum and consistent sales.
Let it flow….
Wal-Mart and other retailers could care less if their ads are leaked. They just make a fuss in oder to get free press and make it look like the deals that are leaked are somehow better than everyone elses. They are hoping the consumer will think that if Wal-Mart is so protective, then the deals must be really good. Even if Wal-Mart sued, they wouldn’t want to win.
Free publicity! Wow, imagine that…this is just another example of the marketing evolution and how we need to be open to change, and be agile. Happy Holidays!
My impression is that fighting the ad leaks indicates the retailer prefers to sell something tomorrow rather than today. Clearly not a good marketing practice. CMR (Customer-Managed Relationships) is replacing CRM (Customer Relationship Management) as the future of retail. Simply put, retailers benefit when they cede control to their shoppers.
Retailers have a choice–meet shopper needs and desires and win, or ignore them and lose. “Buzz” about upcoming deals has to be a positive for the retailers. Kill-joy, legalistic corporate policies would only serve to alienate customers. What retailer wouldn’t want to promote actively loyal shoppers who anticipate, research and act on their promotional offers?
Nikki is so insightful in her comparison of this situation with the sad miscalculations of the recording industry. Protection of 1890s-style intellectual property is losing relevance in today’s fast-cycling consumer marketplace. Speed, nimbleness, and responsiveness to consumer needs will frequently overwhelm the benefits of lawyerly protection.
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Traditional marketers are only beginning to understand online media. The first reaction, as we saw last year, is suspicion and a proclivity to call in the lawyers. Decades of being able to control the messaging, control the brand and control the timing leaves marketers in a fantasy world: They think they still have control.
But they don’t. Some brands are now largely determined by customer reviews. Messaging must be more nimble, appropriate to the audience and the medium. As for timing? Forget it. Last year’s news reports included data suggesting that online was eating into Black Friday itself, as consumers, presumably waiting for the button to pop up on the bird, logged on and shopped.
The information gets out. All you do when you threaten to sue these sites is create ill will among customers.
Circuit City made a big deal about a deal site I visit frequently, posting the price drop on the Playstation 3 early, a while back.
I can tell you that the posters on that site bash Circuit City every opportunity they get.
As they say, you can’t estimate the value of “free advertising” and the “added value service” associated with giving consumers more time to plan their weekend of shopping…I expect retailers will benefit from this activity over the long term but will need to either extend the hours of “special pricing” or move to a “site to store” shopping system to maximize the revenue opportunity.
Apparently certain retailers got the memo that told them the purpose of advertising: more traffic. Every store needs to know what it costs to get a shopper to show up. This applies to online retailers as well as the bricks and mortar locations. It isn’t unusual to pay $5 to $25 just to find a customer.
Perhaps retailers read the postings on RetailWire on this discussion topic from last year? It was just antiquated thinking that we knew was going to change eventually. This is apparently the year.
Well, I can say this about the retail industry: at least we (unlike the music industry) have learned that you can’t stop consumers from doing what they want to do anyway. Instead of fighting what is inevitable, retailers have changed their position to embrace it. It’s a painful process–instead of the big surprise the week before, everybody has time to counter everybody else’s big move–but ultimately it’s for the best, because consumers will find this info anyway, and if your deals aren’t out there you’ll actually suffer in comparison.
Now if only it were as easy a change in position to embrace cross-channel consumer behavior….
Stay tuned…early ad leaks soon to be Niagara Falls! Retailers have always known this. “Give the consumers what they want!”
Early ad strategy is a campaign science that must be implemented with the greatest of care. Competitive mistakes are extremely costly to the bottom line profit of a product campaign. Manufacturers also have a watchful eye and are depending on a retailer’s keen execution of early ad strategy.
I understand the retailers’ knee jerk reaction of protection but there is a golden opportunity here that needs to be managed properly for optimum and consistent sales.
Let it flow….
Wal-Mart and other retailers could care less if their ads are leaked. They just make a fuss in oder to get free press and make it look like the deals that are leaked are somehow better than everyone elses. They are hoping the consumer will think that if Wal-Mart is so protective, then the deals must be really good. Even if Wal-Mart sued, they wouldn’t want to win.
Free publicity! Wow, imagine that…this is just another example of the marketing evolution and how we need to be open to change, and be agile. Happy Holidays!
My impression is that fighting the ad leaks indicates the retailer prefers to sell something tomorrow rather than today. Clearly not a good marketing practice. CMR (Customer-Managed Relationships) is replacing CRM (Customer Relationship Management) as the future of retail. Simply put, retailers benefit when they cede control to their shoppers.
Retailers have a choice–meet shopper needs and desires and win, or ignore them and lose. “Buzz” about upcoming deals has to be a positive for the retailers. Kill-joy, legalistic corporate policies would only serve to alienate customers. What retailer wouldn’t want to promote actively loyal shoppers who anticipate, research and act on their promotional offers?
Nikki is so insightful in her comparison of this situation with the sad miscalculations of the recording industry. Protection of 1890s-style intellectual property is losing relevance in today’s fast-cycling consumer marketplace. Speed, nimbleness, and responsiveness to consumer needs will frequently overwhelm the benefits of lawyerly protection.