amp Energy Drink Advertising 335 April 16, 2010
Agency The Hyped Typers are an ideal agency for those who are looking for a fresh, energetic and articulate creative team to suit their needs. The Hyped Typers comprises four Iowa State graduates. Combined, the agency has 16 years of experience with multiple advertising media including broadcast, print and with an emphasis in social media. We the Hyped Typers take pride in our ability to pair pioneering strategic plans with ingenious ideas in order to satisfy our clientele. Alex Rich Allard Jobson Michaela Sabin Rebecca VanDeCasteele
Plan Summary Brand: PepsiCo amp Energy Drink Product: Energy Drink Demographic Target: males, ages 18-24, college students Geographic Target: National, Pacific area colleges Timing: August, November-December, March-May Reach: Target=70 Actual=70.5 Frequency: Target=5 Actual=4.8 Media: National TV, Spot Newspapers, Internet, Product Placement, Sponsorships CPM: $284.34 CPP: $6,827 Budget: $20,000,000
Industry Trends From the start of energy drinks in 1995, annual retail sales have been on the rise. Over the past few years, sales have decreased to a 15-20 percent annual growth rate, with estimated sales over $4.8 billion in 2011. With the push for a healthier lifestyle, the development of diet energy drinks has shown great interest from the energy drink consumers. It wasn’t until the year 2007 that amp decided to spend money advertising its line of drinks. In 2008 amp spent a little over $18 million in advertisements, almost a 100 percent increase from the year before. Over the past couple of years, amp’s advertising spending have been blown away by Red Bull’s $51.3 million. Monster holds up the rear with a little over $1 million in spending in 2008. It is easy to see that the focus on energy drinks have risen drastically over the past 15 years. With the invention of diet energy drinks and 5-hour energy drinks, it is easy to see that this industry is not going anywhere anytime soon.
Product PepsiCo launched the amp Energy Drink lines to take advantage of the new market. A 16 oz container of amp includes 143 mg of caffeine. As of 2009, amp products include sugar free, overdrive (red cherry flavored), relaunch (orange flavored), elevate (mixed berry flavored), lightening (lemonade flavored) and amp green tea. In the first quarter of 2010, amp launched energy gum and amp juice.
Situation Analysis Product attributes: Product is produced and distributed by PepsiCo. It tastes like a cousin of Mountain Dew and comes in different sizes and types. Competition: Red Bull & Monster energy drinks Current pricing: $1.49 for 8 ounces. Competition pricing: Red Bull: $2.00, Monster: $1.99.
SWOT Strengths Weaknesses • One of the cheapest energy • Less known compared drinks in market compared to Red Bull & Monster to Red Bull & Monster • Not marketing towards • PepsiCo is a very well everyone (more known company with a very towards males rather good brand image than females) • There is much variety in the • Limited advertising product line efforts • Good social media contacts • Relatively new to the (Facebook, Twitter, etc.) market • Interesting, interactive website Opportunities Threats • Create street teams and • PepsiCo getting rid of campaigns around target amp markets • Red Bull/Monster • Create more products like a becoming more “shot” instead of a big can powerhouses • Create more “juice” products • Stricter regulations for more health-conscious from the FDA demographic • Aging market with more people becoming more health-conscious
Current Distribution This product is distributed all over in the United States. There are street teams with amp cars that distribute free limited-edition cans of the product at lifestyle venues and events. Each local amp Energy team can be followed on Twitter to see which events they are hosting or attending next in each region. Twitter and Facebook pages give fans access to events, videos and updates.
Current Advertising With a current ad campaign with a theme of “amp UP”, amp has produced many viral videos that portray some sort of extreme activity. These are 30-second to Right before the end of the 1-minute spots that spot, the words on the screen dramatically show say “right before your big activities such as getting moment.... AMP UP”. a tattoo and snowboarding down a mountain. Along with the viral videos (that have begun airing on national television), amp also sponsors NASCAR Sprint Cup Series driver Dale Earnhardt Jr., extreme sports athletes Mason Aguirre, Hannah Teter, Keir Dillon, Kevin Pearce, Chad Kagy and Anthony Napolitan. And World Extreme Cage Fighting (WEC) announced amp will be the official energy drink of WEC.
Goals and Strategy The main goals of this campaign are to raise awareness and steal share market share from Monster. We also hope to make amp the “in drink” for the target. Our strategy is to pair high frequency (5) with high reach (70) to target new consumers as well as current consumers as many times as possible. We will use national television, spot collegiate newspaper advertising as well as product placement, sponsorships and sampling to reach our goal.
Demographic Target Through our research we have found that most amp energy drink consumers are single, white, males, ages 18-24 and having some college experience. This leads us to believe that the consumer is likely in college. We have chosen to target male college students with our advertising efforts.
Geographic Target The MRI data shows that there is a higher emphasis of energy drink consumers in the Pacific, South East and South West regions of the United States. PACIFIC- MKTG REGN 7137 26.3 16.4 134 SOUTH WEST 3626 13.4 13.9 114 SOUTH EAST 5309 19.6 11.9 97 WEST CENTRAL 3630 13.4 10.9 89 EAST CENTRAL 2783 10.3 9.9 81 MIDDLE ATLANTIC 3654 13.5 10.5 85 NEW ENGLAND 958 3.5 8.8 72 We chose to use spot advertising in the pacific area colleges paired with a national television campaign. The Seattle, Los Angeles and Las Vegas spot markets were chosen based on their location in the Pacific area and the size of their markets.
Creative Strategy Amp’s current tag line for their main advertising campaign is “before your big moment...amp UP”. We agreed that this was a very creative and effective idea, so we decided to play with that idea for the new campaign. The idea behind this campaign will be “amp UP your life”. This will be translated into many different situations that the demographic target will identify with. For example, while advertising to students taking finals and working on projects, the tag line will be “amp UP your finals” or “amp UP your project”. Using this idea will provide a seamless transition from the last campaign and will be consistent with the overall image of the brand.
Media Mix National Television Internet 14 Spots/Month 10 MM/Month (4 Prime Time/10 Late Night) Targeted websites have the We chose television programs ability to see other websites a that have higher viewers that consumer has visited and are males ages 18-24. display ads accordingly. MTV: Targeted Websites: Jersey Shore Facebook Real World Twitter STA Travel ESPN: Textsfromlastnight SportsCenter ESPN PTI TBS: The Office Spot Print Conan O’Brien 10 Spots/Month (Full Page, B/W) ABC: Modern Family Advertising in collegiate newspapers is a great way to reach college students, Product Placement our target. Product placement is a University Times great way to gain California State University exposure without the Los Angeles, California target feeling angry at the brand or product. The Spectator Seattle University We hope to get a product Seattle, Washington placement deal with Real World, potentially as the The Rebel Yell “job” the cast members do UNLV while on the show. Las Vegas, Nevada
Timing We decided to run our campaign for a fiscal year, starting in August. We chose the month of August to begin with because this is the time at which most schools are in session. We focused our campaign to last through the school year, running heavier advertisements during the finals week in mid December, late April and early May. Because our target market consists of college students with ages 18-24, we have found that in order for them to stay awake longer, most students consume energy drinks while studying for finals and working on big projects. We came to the conclusion to run heavier ads around the spring break period as well, when most students have midterms and group projects due. When school is out of session, we are going to run event sponsorship advertisements during the months of May, June and July.
Reach and Frequency Reach: We chose a reach of 70, which is on the higher side, but still within the average. We hoped to expose a larger audience to the campaign in order to ultimately gain a larger consumer base. Frequency: Our frequency goal was 5, which is also slightly high. We hope to reach the target as many times as possible, in order to get them more familiar with the brand and product. We hope that this will steal market share from the competition (Monster), and ultimately increase our market share and consumer base.
Budget We propose a budget of $20 million. In the MFP campaign, we spent a little over $14 million in spot newspaper advertising, prime time and late night television spots and targeted Internet advertising. The additional $6 million will go to product placement, free product to give away, event sponsorships and implementing more stable college street teams.
Evaluation $14 of the proposed $20 million was used in a spot and national campaign in MFP. We obtained a reach of 70.5 and frequency of 4.8, which are very close to the targets of 70 and 5 respectively. The remaining $6 million will be poured into free product sampling events, sponsorship opportunities, implementing street teams and a product placement deal. The $20 million was spent wisely and our objectives were met with this campaign.