This sponsorship tie was hard to digest

Bloomberg News reported in April that Bayer AG, maker of drugs to treat heart disease and indigestion, has severed ties with a U.S. company that promotes speed-eating.

Bayer’s heartburn-relieving Alka-Seltzer was a sponsor of the 2005 U.S. Open championship of the International Federation of Competitive Eating Inc. (IFCOE), which organizes eating contests around the world. Bayer’s U.S. marketing staff made the decision to sponsor the event, said Bayer HealthCare spokesman Hartmut Alsfasser. “We became aware of it and stopped it immediately. This was a one-off marketing event, which won’t be repeated,” he said.

Takeru Kobayashi and Sonya Thomas competed with 30 other contestants for a total $40,000 in prize money at the event in Las Vegas last July. Kobayashi is famed for swallowing 57 cow brains in 15 minutes, while Thomas has eaten 65 hard-boiled eggs in 6 minutes and 40 seconds, according to IFCOE.

Bayer’s association with IFCOE, which says competitive speed-eating is a sport, drew criticism from the Coalition Against Bayer Dangers, a group that campaigns against the Leverkusen, Germany-based company. “It is obvious to all that excessive eating is a danger to health,” said Hubert Ostendorf, a spokesman for the group. “Paradoxically, Bayer offers diabetic remedies to cure the diabetes that is often caused by the very events they are sponsoring,” he said.

Almost a third of adults, or around 60 million people, in the U.S. are obese, according to the American Obesity Association (AOA). The chronic condition is linked to diabetes, heart disease and cancer and is the second-highest killer among preventable diseases, AOA says. It estimates annual health care costs related to obesity at around $100 billion. 

TiVo debuts on-demand ads

TiVo has launched Product Watch, a service offering on-demand ads to its 4.4 million subscribers. (Somehow, the words “on-demand” and “ads” just don’t go together.) As reported by the Wall Street Journal’s Brian Steinberg, about 70 advertisers, including Kraft Foods, Ford Motor, General Motors and LendingTree, have signed up.

Rather than standard 30-second commercials, the marketers will offer longer-form ads that focus more on informing than selling. Kraft, for example, offers 20 different cooking videos showing how to create a Jell-O dessert, make a potato salad or grill one of its Tombstone pizzas. Ford has tapped magicians Penn and Teller to perform tricks on a golf course, with a Ford vehicle nearby. In LendingTree’s ad, personal finance guru Suze Orman gives overviews of different types of loans.

Users can search for ads in categories such as finance and travel and leisure. (Marketers are charged only for viewers who download an ad.) TiVo is hoping that viewers will use the service in a manner similar to the Internet, as a way to research products and services. While it is certainly hard to imagine large numbers of viewers plopping down on the couch to watch commercials, if the ads offer some kind of value - whether via entertainment or information - they could find an audience. 

The pay-per-view approach was attractive to charter advertiser Tourism Australia, which is using Product Watch to offer four documentary-style ads about things to do in Australia, such as seeing marine life on the Great Barrier Reef. Talking to consumers one-to-one is preferable to aiming at masses who may not be interested in the ad message, said Michael Londregan, vice president of Tourism Australia. “Australia doesn’t have the budget to aim broadly and fire erratically at the whole consumer market,” he said.

“TiVo’s Latest Viewing Option: Commercials,” Wall Street Journal, May 8, 2006

Wal-Mart goes upscale in Texas

Wal-Mart has opened a new supercenter targeting upscale shoppers and catering specifically to the needs of female shoppers. As detailed by Patricia Odell in Promo magazine’s Promo Xtra, the 203,000-square-foot supercenter is unlike any other in the Wal-Mart chain. Everything is different, from store layout to merchandise selection to new signage and graphics to a selection of fine wines. “With the opening of this store, Wal-Mart is adopting an active approach to understanding and meeting customer needs, particularly those of the selective female shopper,” said John Fleming, Wal-Mart’s executive vice president and CMO.

Fleming said the company plans to use the supercenter - located in Plano, Texas, in a highly competitive retail corridor - as an lab for testing new ideas. “If something doesn’t work, we will change it and try something else. And when an innovation resonates with our customers, we will consider introducing it in other stores.”

Some of the new features include:

  • Store layouts geared to women. For example, consumables, pet food and health and beauty aids are adjacent to grocery.
  • New signage and graphics that individualize the store’s eight main shopping areas - food, apparel, home, health, beauty, do-it-yourself, electronics and baby.
  • An apparel area with its own cash registers, more privacy and space in dressing rooms and more space around clothing racks. Clothing purchases will be carried out on hangers instead of being folded and placed in a bag.
  • A quieter shopping environment - no in-store radio, fewer P.A. announcements and quieter cash registers. Wal-Mart TV will be found only in certain areas.
  • An expanded grocery selection and thousands of premium items in wine, dry grocery, meat, cheese and products that are new to Wal-Mart supercenters.
  • A sushi bar and a Wi-Fi-enabled coffee shop.
  • Hundreds of additional organic and natural product offerings.

Plano has an estimated population of 236,929 as of January 1, 2003. The median age is 34.1 years and 68.2 percent of the population is 21 years or older. Of the total households, 74.9 percent are families and 42.01 percent have children under 18. The percentage of household incomes over $100,000 increased from 27.8 percent in 1990 to 36.8 percent in 2000. The median household income for Plano also increased from $72,233 in 1990 to $78,222 in 2000, according to the U.S. Census Bureau.

“Wal-Mart Opens Supercenter for Upscale Shoppers,” Promo Xtra, March 30, 2006, http://promomagazine.com