Kraft Foods Inc

Folio: The Magazine for Magazine Management, April 1, 2000 by Jeff Garigliano

DON MICELI

VICE PRESIDENT, MEDIA SERVICES

Take a walk through your local supermarket and you'll find Kraft products on just about every aisle. The largest packaged foods company in North America, Kraft comprises more than 70 separate brands, including a grocery list of household names like Velveeta, Cracker Barrel, Miracle Whip, Philadelphia Cream Cheese, Kool-Aid, Post cereals, Oscar Mayer and Maxwell House. Part of the larger Philip Morris conglomerate--along with cigarette companies like Marlboro, Benson & Hedges and Virginia Slims, and Miller Brewing--Kraft posted revenues of $17.5 billion last year. We talked to Don Miceli, vice president, media services for Kraft North America, about how print advertising stacks up to television.

Q: How much do you rely on print in your overall media budget?

A: For packaged goods advertisers in general, television tends to represent the biggest part of the budget--as much as 80 to 90 percent of all media spending. Part of the reason is that television still offers some significant advantages. Print production times can be long, for example, which means it's less flexible as a medium. Print also tends to be more difficult to measure, specifically the audience accumulation patterns. When a TV ad runs, you know exactly when it runs and exactly when your consumers saw it. But when those consumers buy a magazine, there's no way to track when they actually look at the ad. The audience is there, but it's tougher to pinpoint in terms of timing.

Q: Have you increased or decreased your spending in print recently?

A: We've recently scaled back on television and we're redirecting some of that money into print. Television now represents about 65 to 70 percent of our overall media expenditures, and for 2000, print could make up close to 20 percent. Time will tell, as the year rolls out. But that's up from 10 to 12 percent in years past.

Q: Why the switch?

A: Costs have increased for TV advertising, and the rise of cable has meant that audiences are now more fragmented. That's not to say we're giving up on television, but rather that we've gotten good results recently by altering the mix.

Q: Can you talk a little bit about some of your recent campaigns?

A: The one we did for General Foods International Coffees springs to mind. The brand people who manage that product have done a ton of research into the things its consumers like to do. Consumers for this product are mostly female, of course, and one of the things the researchers found is that the brand centers on the individual and self-indulgence, not in the bad sense of that phrase. These are women who like to indulge in so-called "personal moments." They enjoy their homes, for example, and they like flowers.

So we wanted an ad that would tap into that. And we came up with a four-page print execution in a partnership with 1-800-flowers. It ran as the centerfold in People and in Country Home. You open up the gatefold and there's a coupon for General Foods International Coffees, a coupon for 1-800-flowers and a chance to win a bouquet of flowers every week for a year. We don't have a business arrangement with 1-800-flowers, but the fit seemed like a natural for us. It was a great campaign.

Q: How great? Did sales of those coffees go up?

A: It had a volume impact. We don't release sales numbers, but I will say that we saw a noticeable boost in volume when those ads ran.

Q: So what can magazine publishers do to retain or win your business in the future?

A: The best magazines, we think, are those that can come to us with very specific research on their readers. That's a strength of print-it generally has better information about its readers' lives, their preferences, how they spend their time and their money, than other media. We think publishers need to bring ideas that truly marry their readers with the brand we're trying to promote. If there's a fit, a good match between our brand and theirs, then we will do business with them.

KRAFT FOODS INC.

Headquarters: Northfield, Illinois

Total annual revenues: $17.5 billion

Major brands: Velveeta, Cracker Barrel, Miracle Whip, Philadelphia Cream Cheese, Kool-Aid, Post cereals, Oscar Mayer and Maxwell House Total ad dollars spent in magazines, 1999.: $207.5 million Recent major campaign: General Foods International Coffees

Target audience: Upper income women with particular psychographic and behavior traits including self indulgence, enjoyment of their homes and flowers

                         KRAFT'S AD PAGES, SPENDING
                         IN MAGAZINES IN THE FOOD &
                          FOOD PRODUCTS CATEGORY
     Ad Pages  Ad Dollars
1991    1,234 $87,260,432
1992    1,346 107,175,832
1993    1,463 120,375,024
1994    1,183 110,481,440
1995    1,792 167,573,552
1996    1,583 164,237,024
1997    1,530 178,075,488
1998    1,547 175,750,096
1999    1,640 200,426,480
SOURCE: PUBLISHER'S INFORMATION BUREAU