Fever-Tree test; Oh ’No-atly; cliches and the climate
With its sales slowing and share price dropping, the creative pitch for Fever-Tree will be a fascinating test for advertising, writes Dominic Mills. Plus: naff Oatly ads, lazy adland stereotypes, and a response to Tess Alps and Ollie Joyce
A quick rummage through the kitchen cupboard at home reveals that I am a ‘Fever-Tree bloke’; tonic, elderflower tonic, ginger beer, ginger ale. I rarely drink spirits, so that seems like over-kill, all the more so given the price premium it commands over common-or-garden rivals.
I’m not really sure how I became a Fever-Tree bloke. I’m vaguely aware of some advertising — print, I think — but I don’t think it is that that has driven my purchases. It’s more down to on-shelf visibility, and word-of-mouth — although both are of course results of advertising. I’d bet that, as a percentage of adspend to sales, Fever-Tree’s is lower than its competitors’.
But all that may be about to change in the wake of last week’s news that Fever-Tree has put its account up for grabs and asked Lucky Generals and MullenLowe to pitch.
This fascinates me because it is, in many ways, a classic test for advertising.
The news of the pitch came at the same time — surely no coincidence there — as Fever-Tree’s latest trading statement, which revealed that for only the second time in its short but stellar life, sales were slowing. But only in the UK, by 1%, while they continued to grow elsewhere.
No need to panic, you might think, except that Fever-Tree’s share price fell by 27% on the news. Fever-Tree’s share price is both a blessing and a curse. Since it went public in 2014 at a price of £1.34, the price hit a peak of £37.23, and currently stands at £14.79. That is still an astonishing gain for anyone who bought in six years ago, but a monumental pain for later buyers seduced by its growth story. You can see the chart over five years here.
It is inevitable now that, as Fever-Tree reconfigures its advertising strategy, management will also be looking nervously over its shoulder at the stockmarket reaction.
Which is where the advertising is crucial and why the task is so interesting. It is clear that the share price has been driven both by continuous growth and a hefty price premium — as much as 40% over some rivals — although you’d need an econometrician to divine the balance.
It will also need to be based on a clear understanding of the slowdown. Is it the price? Has the craft gin boom, of which Fever-Tree was an undoubted beneficiary, run its course? Have the competitors got their act together? Or has its novelty value worn thin?
Thus, in an ideal world, the advertising needs to both drive growth and sustain the price. This is difficult, but by no means impossible as anyone who remembers Stella Artois’ long-running ‘Reassuringly expensive’ slogan will know. That lasted for more than 20 years until, for reasons best known to itself, Stella decided to go all out for growth and now has an altogether different reputation.
What is interesting about those Stella years is that the advertising was not only outstandingly creative, but underpinned by some heavy-duty planning. Indeed, the production values on those famous TV commercials were themselves reassuringly expensive.
And this combination of creativity and strategy is, in my opinion, exactly what both Lucky Generals and MullenLowe bring to the party. We’ll wait to see the results, but Fever-Tree has chosen wisely so far.
I like the milk in my coffee straight (semi-skimmed, actually) so Oatly has never done it for me. In fact, come to think about it, I wonder if it is due its Fever-Tree moment some time soon.
I ask because I’ve been hit in various London locations over the last ten days by an Oatly bus shelter campaign. I get the logic: it’s January, and Oatly falls into the New-Year-let’s-go-vegan-resolution category.
But why are the ads so naff in a vaguely post-modern way? Ads that reference advertising are just so….euuuurgh. They try to be knowing but in an utterly fake way. Who cares?
And if you do, doesn’t it remind you of the Oasis campaign from a couple of years ago. ‘Advertising Doesn’t Work on You. Celebrate This Fact with a Tasty Drink’ went one slogan. ‘It’s Summer. You’re Thirsty. We’ve Got Sales Targets’ was another.
Please stop now, Oatly.
Cliches and sympathy
Seeing as its woes are self-inflicted, I’ve been enjoying the M&C Saatchi accounting and boardroom rows saga more than I have been feeling sympathetic.
Until last week that is, when an FT commentary piece on its travails trotted out some hoary cliches about adland — ones that should have been laid to rest by the mid-90s.
Apart from a swipe that made me laugh — paraphrased as ‘creativity is what advertising agencies do but it shouldn’t spill over into the finance department’ — the piece then went on to say: “Chasing up debts was never the forte of cigar-waving ad gurus. But big ideas and bigger specs are no longer enough to preserve a dying business model."
And actually, while I’m at it, I would observe that most of the advertising businesses I know keep creativity well away from finance these days (although it wasn’t always thus), and the finance people I’ve met have been top-level professionals. Much of the recent accounting ‘creativity’ or laxity we have seen recently has been elsewhere (Carillion, Metro Bank, Ted Baker, Pat Val etc).
Perhaps I’m being too literal and sensitive about adland, but cigars went out of style many many years ago, and as for the big, statement specs — also history. The only thing that was missing was a reference to stripy braces.
But really. You’d expect better from the FT than to trot out the lazy stereotypes. If they’re going to use stereotypes, how about something that is, say, five years out of date: plaid shirts, narrow trousers and mankles, mixed in with some full-on wokiness. Or am I as bad as the FT?
A couple of weeks ago I publicly agonised over what I called adland’s Messiah Complex, the result of what I saw as the insistence of some that the industry had a duty and responsibility to solve (or mitigate) the climate crisis.
And here is an example of the kind of thinking that provoked my original thinking which seems to be a combination of guilt and over-claim.
Have I changed my mind? Yes and no. I accept that advertising’s skills in framing the communications issues and helping consumers choose products and services that are climate-change combative can be invaluable particularly if, as Tess Alps says, the consumers can also get an emotional reward for their choice.
Ollie Joyce meanwhile argues that, in terms of the ad industry’s ability to influence clients, the industry is pushing at an opening (if not open) door, while at the same time consumer attitudes are irrevocably changing. I like his agency ‘Starter for Ten’ list too.
What I haven’t changed my mind about is the idea that the impetus must come from government and clients, albeit that they are pulled in that direction by electorates and consumers, rather than advertising.
And the debate will continue…