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Ads aim to open the wary wallet

Firms try to prevent frugal shoppers from choosing store brands

After Hormel Foods started a new ad campaigns last year, sales of Spam and Dinty Moore stew rose by double-digit percentages in the quarter that ended Jan. 25. After Hormel Foods started a new ad campaigns last year, sales of Spam and Dinty Moore stew rose by double-digit percentages in the quarter that ended Jan. 25. (Hormel Corp. via Associated Press)
By Anne D'Innocenzio
Associated Press / April 22, 2009
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NEW YORK - The frill is gone.

Companies are moving their ad dollars from gourmet or frivolous items to pantry staples and traditionally ho-hum household goods. Hamburger Helper, Kool-Aid drink mix, and that golden oldie, butter, are advertising stars these days.

The new advertising is aimed not only at cashing in on the new frugality of recession-wary consumers but also fending off a flight to cheaper store brands. It also can help companies maintain their share of a shrinking consumer-spending pie.

In some cases, the ads are paying off with higher sales.

"In this 'Great Recession,' economy, companies are not simply changing the messages they place in their ads. They are doing something much more substantial," said Marc Fleishhacker, senior partner and managing director of OgilvyConsulting's North America practice. "They are fundamentally changing the products they promote."

Land O'Lakes Inc., the maker of deli cheese, eggs, and butter, recently launched its first TV campaign for its basic butter product in 10 years.

Hormel Foods Corp., which increased its spending on ads for Spam last year, began its first national ad campaign for Dinty Moore stew last fall. Sales for Spam and Dinty Moore stew rose by double-digit percentages in the quarter that ended Jan. 25.

Home Depot, the nation's largest home improvement retailer, is pushing items like potting soil and hand tools under a new tag line: "More saving. More doing." Last spring, in contrast, Home Depot had focused on how to create dream kitchens.

Many ads now also have a soothing feel to allay consumer anxiety. Allstate Insurance Co.'s "Back to Basics" commercial looks back to the Great Depression and other tough periods when people enjoyed small things like a home-cooked meal. A General Motors Corp. ad, which has a patriotic theme, promises to make payments if customers lose their jobs.

Shoppers who have noticed the new ads applaud marketers for understanding their changed psyche.

"I like the messages out there. It's less focused on consumerism and buying the best," said Andrea Beck, a 39-year-old stay-at-home mother of two from South Orange, N.J., who said she has slashed her household's spending on food and lawn care.

The shift to highlight more everyday products follows more than a decade of companies pushing $30,000 kitchen renovations, $15-per-pound cheeses, and flashy jewelry as rising home values and growing stock portfolios made consumers feel flush.

No more. The recession has brought on an abrupt change in shoppers' mindsets.

Consumer spending not adjusted for inflation grew last year at the slowest rate since 1961 and is expected to remain sluggish for the rest of the year.

In the fourth quarter of 2008, spending on food and nonalcoholic beverages fell 3.2 percent, according to Scott Hoyt, senior director of consumer economics at Moody's Economy.com.

In the last big recession, in the early 1980s, consumer product companies simply shrunk their ad budgets, said John Greening, a 28-year advertising industry veteran and now an associate professor at Northwestern University's Medill School of Journalism.

But they can't afford to do that this time, as shoppers are shifting to lower-priced store brands, spending more at discounters, scraping the last dollop of face cream from the jar, and buying more cheap canned goods and pasta.

Sales of store-label consumer products rose 9.1 percent to $84.8 billion in the 52 weeks that ended March 21, while the sale of brand-name goods gained just 1.7 percent to $421 billion, according to data from Nielsen Co.

"People are willing to settle for value-oriented products," Greening said. "It doesn't have to be the best; it just has to be the best for the value of the money."

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