Thursday, November 05, 2009

7223: Gringo Market Domination…?

Advertising Age reported that IKEA is seeking to integrate its White and Latino advertising efforts. Sounds like forced assimilation for the minorities. After all, clients are loath to demand that White agencies become more culturally integrated.

Ikea Begins Creative Review to Integrate General Market With Hispanic
Retailer Says It Is Searching for Improved Communications Efficiency in U.S.

By Natalie Zmuda and Rupal Parekh

NEW YORK ( -- Swedish furniture retailer Ikea, nearing completion of a media agency review, is now examining its creative roster of U.S. agencies in what it calls a move towards “integration of general market and Hispanic creative.”

The marketer has hired Boston-based Pile & Co., which has managed agency reviews for the retailer before, to assist with its “integrated communications” search.

“Ikea is evaluating all creative agency partners and identifying areas for improved communication effectiveness and efficiencies,” said Leontyne Green, marketing manager for Ikea U.S. “Integration of general market and Hispanic creative could afford Ikea the best opportunity to develop breakthrough messaging and establish a more-integrated approach to marketing communications.”

The marketer said it now partners with numerous creative agencies, citing Deutsch and Anita Santiago Advertising as specifically participating in the review.

Ikea, which spends some $300 million globally, is known in marketing circles to be a bit finicky, conducting agency reviews with some regularity. Its agency roster spans various holding companies: Omnicom Group’s Ketchum handles PR; WPP shops Mediaedge:cia and Mediacom have handled media duties, and Interpublic Group of Cos.’ Deutsch has U.S. creative.

Deutsch has a long history with Ikea; the retailer handed domestic creative duties back to the shop in 2006 after a break from a decade-long stretch of working together. The agency is expected to participate in the latest review.

Separately, Ikea is wrapping a seven-month-long review of its media-agency partners, and executives with knowledge of the process said the company is expected to make a decision soon. Mediaedge:cia has handled planning and buying for the furniture maker in the U.S. and certain global markets, while sibling Mediacom handles the business in other regions.

“Ikea U.S. is tasked with driving the business in an unprecedented way,” Ms. Green said. “Consequently, having strong, consistent and relevant communications will become even more critical to delivering to that task.”

Nontraditional marketing methods
Ikea’s marketing strategy tends to veer away from TV and other traditional methods. In recent times, it has favored using branded entertainment as a marketing tool, including movie integrations with “Mamma Mia!” and “(500) Days of Summer” and branded webisode series “Easy to Assemble,” starring celebs such as Justine Bateman and Tom Arnold. It also staged an in-store opera and an elaborate out-of-home campaign dubbed “Embrace Change” in honor of Barack Obama’s inauguration, creating a replica of the Oval Office in a train station.

Earlier this year, Ikea marketing chief Magnus Gustaffson told Ad Age the company plans to devote an increasing amount of its estimated $300 million global marketing budget to digital media in the coming years, using projects such as “Easy to Assemble” to engage its customers.

“In the next three to five years, we can expect both content concepts and the distribution model to develop even more rapidly,” Mr. Gustaffson previously said. “So in that time frame, the importance of the 30-second TV spot, as we know it, will decrease and the importance of something that today is perceived to be more niche, i.e., web series, will increase.”

Like other retailers, Ikea has been hit hard by the recession. Over the summer it laid off 5,000 employees, or 4% of its workforce. And it has slowed store openings, expecting to open about 15 new stores next year, primarily in Europe. For the year ended Aug. 31, Ikea reported sales of $30 billion, up 1.4% from the year prior. In total, Ikea operates 267 stores around the world.

In the U.S., the retailer’s 2010 catalog highlights new, lower prices throughout, surely an effort to attract cash-strapped consumers who have been delaying home purchases. The 2010 catalog also garnered attention for its shift from Ikea’s version of the Futura font to Verdana—a move that ruffled brand loyalists, designers and typography junkies, and received tons of PR coverage.

Contributing: Michael Bush

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