Can Canada set roots as a testing ground?

When Pittsburgh, Pa.-based H.J Heinz Company launched a global advertising campaign for its flagship brand last April, ketchup was at a crossroads. Once the undisputed king of condiments, ketchup was quickly losing its crown to salsa, a chunky Mexican rival that...

When Pittsburgh, Pa.-based H.J Heinz Company launched a global advertising campaign for its flagship brand last April, ketchup was at a crossroads.

Once the undisputed king of condiments, ketchup was quickly losing its crown to salsa, a chunky Mexican rival that had eaten into ketchup sales like bagels mowing down the cereal aisle. To make matters worse, Heinz Ketchup’s advertising just wasn’t connecting with the emerging tween market, a critically important group of brand-conscious consumers.

Clearly, the manufacturer could no longer count on Carly Simon’s dulcet tones to propel bottles off of supermarket shelves – it needed to make ketchup cool.

So when Heinz repositioned its ketchup brand early last year, it did something slightly unusual: it used Canada as a testing ground, and launched its global advertising campaign here a full six months before any of the new creative aired in the U.S.

The campaign was actually devised by three regional Heinz groups – the U.S., the U.K., and Canada – and relied on input from the Chicago, London and Toronto offices of Leo Burnett (although the Chicago team actually executed the creative).

But because of its streamlined management structure, Heinz Canada was able to get its advertising to market far in advance of any of its regional siblings, some of which didn’t introduce the new creative until the fall.

‘In Canada, we took the lead to be on air first in April, and to be on air at higher weights than any other country, and for longer than any other country,’ explains Susan Yorke, general manager, ketchup and specialty condiments, for the Toronto-based manufacturer. ‘In Canada, with this campaign as an example, we only needed one person – our president – to say ‘Go’, and that was it. In the U.S., there are a few more layers after that.’

The creative approach was unlike anything the manufacturer had ever used to promote ketchup. Playful, yet slightly menacing, voice-overs were squarely aimed at younger consumers, who were encouraged to ‘smother french fries until they can’t breathe’ with Heinz ketchup – a clever way of persuading them to splash more of the gooey red stuff on their food.

Repositioning such an established brand comes with obvious risks. But by testing the creative concept, Heinz at least gave itself a cushion – if the campaign had tanked in Canada, chances are it would have been a bust in the U.S. as well, where such a mistake could prove calamitous.

The same line of thinking has led other packaged goods manufacturers – such as Kraft, Unilever and Campbell Soup – to experiment with new marketing strategies in Canada before rolling them out in the U.S., thereby giving their Canadian marketing departments and their agencies a chance to take the lead on North American or global marketing efforts.

Campbell Soup, for example, has already tested new products in Canada, such as Fresh Frozen Soup and the Healthy Request line, and is currently trying out other product introductions.

‘The real critical issue is Canada picking its spots, and [deciding] what it should lead with in the global environment,’ says Brian Mirsky, president of the Campbell Soup Company of Canada. ‘It’s particular to individual companies, so for some it may be product, for others it may be packaging or pricing.’

While Mirsky admits there are some significant differences between Canadian and U.S. consumers, he maintains that market similarities – rate of development and household penetration, for instance – make Canada an ideal place to gauge whether a new product or creative approach will work south of the border.

‘When you look at Canada and get the results, you’ve got a pretty high degree of confidence that these products will work in the U.S., subject to some adaptability issues,’ he says. ‘And if you’re a North American parent [company], Canada may represent 10% of the total business, so your risk profile is limited.’

Promoting Canada as a giant focus group, however, requires a certain balancing act. After all, if the markets are similar enough to gauge the likelihood of a new product’s success, why should U.S.-based multinationals maintain a distinct marketing operation in Canada? This approach becomes even more risky when you consider that many large companies are beginning to treat North America as a single, homogenous marketplace in order to hasten the deployment of their global marketing strategies.

By using Canada as a testing ground, however, companies can gauge consumer reaction to a new product across different regions, and experiment with a varied lot of retailers and merchandisers, says Mike Welling, vice-president, brand development with Toronto-based Lipton, a division of Unilever Canada.

‘The challenge of any multinational company is to make sure it has a good understanding of what the fundamental similarities and what the fundamental differences are [between markets],’ he says. ‘Then I think the Canadian market can be a wonderful place to try to execute and test ideas.

As an example, Welling cites the litmus campaign for Dove soap, which was created by Ogilvy & Mather’s Toronto offices in the early 1990s. At the time, Welling was a marketing manager overseeing the personal wash business at Lever Pond’s and the campaign was proving to be far more successful at moving the product than advertising efforts in the U.S. and abroad. In spite of some resistance from Lever’s head office, which felt the brand decisions should only emanate from the U.S., the Canadian creative was eventually rolled out on a global basis, and was instrumental in building market share for the brand.

‘Our colleagues south of the border believed that the world should be running the brand principally based on their direction, yet we had managed to be a more imaginative group in terms of developing the brand,’ Welling recalls.

In the past, many U.S. companies may have balked at the prospect of handing over key marketing decisions to their Canadian subsidiaries. But at least one Canadian marketer believes this attitude is changing, and says that the consolidating retail landscape south of the border should make U.S. packaged goods manufacturers more receptive to input from their Canadian counterparts.

According to Gannon Jones, a senior manager at Kraft Canada’s strategy and insight group, Canadian marketers have had to be more creative with their marketing plans, largely because private label penetration in this market – the consequence of a consolidated retail grocery sphere – is significantly higher than in the U.S.

But with the U.S. market becoming increasingly concentrated over the past year, American marketers may begin looking to Canada for examples of how they can combat the growth of private labels. And as a result, says Jones, they may finally warm to the idea of testing new creative, merchandising strategies or even packaging in Canada.

Even so, Canadian manufacturers can hardly afford to sit back and wait for the U.S. to recognize the advantages of testing new ideas north of the border. In addition to identifying potential opportunities for new products or creative, domestic marketers will have to do a better job of promoting themselves and branding the unique features of the Canadian market.

‘Canada can be a great testing ground,’ notes Jones. ‘But as an industry, I don’t think we look at it that way as much as we should.’

In Brief: The Garden picks CDs to take on daily creative leadership

Plus, Naked names two new leaders of its own and Digital Ethos comes to Canada.
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The Garden promotes two creative directors

ACDs Lindsay Eady and Francheska Galloway-Davis have taken over responsibility for day-to-day creative leadership at The Garden after being promoted to creative director roles.

The pair will also help develop the agency’s creative talent, formalizing mentorship and leadership activities they have been doing since joining the agency four and three years ago, respectively. In addition to creating the agency’s internship program, the pair have worked on campaigns for Coinsquare, FitTrack and “The Coke Challenge” campaign for DanceSafe.

Eady and Galloway-Davis will continue to report to The Garden’s co-founder and chief creative officer Shane Ogilvie, who is stepping back from daily creative duties to a more high-level strategic role, allowing him to focus on client relationships and business growth.

Naked Creative Consultancy names new creative and strategy leadership

Toronto’s Naked Creative Consultancy has hired Yasmin Sahni as its new creative director. She is taking over creative leadership from David Kenyon, who has been in the role for 10 years and is moving into a new role as director of strategy, leading the discipline at the agency.

Sahni is coming off of three years as VP and ECD at GTB’s Toronto office, where she managed all the retail, social and service creative for Ford Canada. She previously managed both Vice Media and Vice’s in-house ad agency Virtue.

Peter Shier, president of Naked, says Sahni’s hiring adds to its creative bench and capabilities, as well as a track record of mentorship, a priority for the company. Meanwhile, Kenyon’s move to the strategy side, he says, makes sense because of his deep knowledge of its clients, which have included Ancestry and The Globe and Mail.

Digital Ethos opens a Toronto office

U.K. digital agency Digital Ethos is pursuing new growth opportunities in North America by opening a new office in Toronto.

Though it didn’t disclose them, the agency has begun serving a number of North American clients, and CEO/founder Luke Tobin says the “time was right to invest in a more formal and actual presence in the area.” whose services include design, SEO, pay-per-click, social media, influencer and PR,

This year, the agency’s growth has also allowed it to open an office in Hamburg, Germany, though it also has remote staff working in countries around the world.

Moray Hickes was the company’s first North American hire as VP of sales, tasked with business development in the region.