Target Corporation

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Target Corporation

NEW YORKER MAGAZINE SPONSORSHIP CAMPAIGN
TAKE CHARGE OF EDUCATION CAMPAIGN

1000 Nicollet Mall
Minneapolis, Minnesota 55403
USA
Telephone: (612) 304-6073
Fax: (612) 696-3731
Web site: www.target.com

NEW YORKER MAGAZINE SPONSORSHIP CAMPAIGN

OVERVIEW

In a bold move designed to attract an upscale clientele and garner widespread media attention, the Target Corporation purchased all of the advertising space in the August 22, 2005, issue of the New Yorker magazine. Target had always aimed for a more affluent demographic than its main competitors, Wal-Mart and Kmart, but in grabbing the attention of the New Yorker's readership, Target was seeking to lure an even higher-end consumer to its stores.

The campaign, created by Peterson Milla Hooks, was limited to the single issue of the New Yorker and consisted of 21 different illustrations created by as many artists. The ad space alone cost in excess of $1 million. Each ad used only the colors black, red, and white, and each featured the Target bull's-eye logo incorporated into a New York scene or theme. The ads ranged from loose, hand-drawn sketches to computer-generated geometric cityscapes. One ad featured a low-angle view of a leather-clad female motorcycle rider in the foreground with a giant bull's-eye rising behind the Brooklyn Bridge in the background, while another depicted a crowd of martini-sipping gallery-goers crowded into a room whose paintings were pop art versions of the Target logo. Not a single line of text or image of a specific product appeared in any of the ads. Instead of selling its wares, Target was selling an urbane, artistic impression of itself to a sophisticated audience it had not reached quite so directly in previous campaigns.

The single greatest success of the campaign was its ability to generate media coverage and to create controversy far beyond the readership of the magazine itself. Almost every national newspaper covered the story of Target as the sole advertiser in the magazine—the first time in its history the magazine had been sponsored by one advertiser—and National Public Radio ran two spots about the phenomenon. And while the American Society of Magazine Editors issued a reprimand to the New Yorker for not following its guidelines for single-sponsor issues, this merely led to additional press coverage and sparked a debate in industry circles about the merits of such an undertaking.

HISTORICAL CONTEXT

Founded in 1962 as a subsidiary of the Dayton Company, Target quickly became the most profitable of the parent company's retail chains. From the beginning the idea behind Target stores was to appeal to customers on the basis of the style of its merchandise and the design of its stores rather than low prices alone. As Bryan Curtis wrote in the online magazine Slate, the founders decided that Target would "exude the mild pretension of a low-end department store rather than the folksiness of a high-end dime store."

By the mid-1980s Target executives were referring to the company's positioning in the marketplace as "upscale discount." Creating this market niche was a way to differentiate Target from its main rivals, Wal-Mart and Kmart, whose sole emphasis was on having the lowest prices in the industry. In keeping with this slightly upscale approach, Target stores were designed with brighter lighting, wider aisles, and more available checkout lines than the competition.

Additional reinforcement of the "discount luxury" concept came in 2000 when Target hired the noted architect and designer Michael Graves to create a line of exclusive household goods for its stores. Graves had previously won an industry award for a tea kettle he designed in 1985 for the Italian firm Alessi, which retailed for $140. The tea kettle he designed for Target, which subsequently became a top seller for the chain, bore a passing resemblance to his previous piece but sold for only $40.

The combination of national branding and upscale designer housewares propelled both Target's sales and its reputation to such heights that in 2000 the company that had founded it (by then Dayton-Hudson Corporation) formally changed its name to Target Corporation. Within a year the company had sold off its other, less-profitable retail divisions.

TARGET MARKET

For Target's "upscale chic" approach to translate into increased revenue, it needed to attract a similarly upscale clientele to its stores. Target had high consumer awareness and strong customer loyalty among lower- and middle-income shoppers, but what the company yearned for was to turn its "more-stylish-than-the-competition" image into a shopping reality for upper-income consumers. To that end, in 1997 Target began to advertise heavily in New York City, mainly through billboards and outdoor signage, even though at the time there were no Target stores in the city or the surrounding metropolitan area. The company was expanding its presence in the northeastern United States, however, and believed that building brand awareness well before the stores were actually open would pay off in the end. In addition, Target hoped to attract a more hip, urban, and wealthy group of customers to its stores, banking on the idea that once trendy New Yorkers were seen wearing Target's clothing lines or using its household goods this would up its cachet among other urbanites nationwide.

It was this that led Target to advertise in the New Yorker. Generally regarded as one of the most prestigious magazines in the United States, this weekly publication was filled with extraordinarily literate journalism mixed with topically relevant New York-themed articles and current events. (It should be noted, however, that despite the magazine's New York area bias, it had more subscribers in California than in New York State.) A casual glance through other issues in August 2005 revealed ads for Jaguar, NetJets, Chanel, Level vodka, BMW, Mercedes, Hartford mutual funds, and Rolex watches, among various high-end products. The average New Yorker reader was hardly a demographic match for the average Target shopper, which was exactly the point. It was among those consumers who could afford to purchase such high-end merchandise that Target hoped to position itself.

The monopolizing of advertising space in the New Yorker made Target's presence in the magazine almost impossible to ignore, but in order to appeal to the tastes and desires of the New Yorker readership the ads themselves did not hawk any particular product or service but instead reinforced Target's branded bull's-eye logo in a variety of subtle and creative ways. Through the Minneapolis-based agency Peterson Milla Hooks, 21 artists were hired to create the full- and partial-page ads for the magazine. No two were alike, and each artist had extraordinary creative license in illustrating the ads. The hope was that the ads, some drawn by the same artists whose work had appeared previously in the editorial portion of the magazine, would attract attention not because of their content but because of their look and style. In short, Target's tastefully creative ads were designed to impress a refined, rather than a bargain-hunting, consumer.

COMPETITION

In 2005 Target was the number-two discount retailer in the United States, behind Wal-Mart and with Kmart number three on the list. Target's overall strategy of emphasizing style and not just price had helped to propel it to the number-two spot, but Wal-Mart's size and ruthless determination to slash prices by every available means meant that Target could hardly hope to compete on price alone.

While Wal-Mart's advertising strategy simply reinforced its low-price approach, with ads and television spots literally showing "falling prices," Target chose to promote style and youthful attitude in its marketing efforts, in large part to differentiate itself from its rival. Thus, while Wal-Mart was Target's number one competitor, Target's strategy was not to lure shoppers away from Wal-Mart but rather to lure shoppers away from even higher-end stores than its own.

MARKETING STRATEGY

In 1999 Target decided to launch an ambitious ad campaign to capitalize on its success as a stylish retail chain by solidly branding the company with its simple red and white bull's-eye logo. The hope was to increase consumer awareness of the logo, thereby creating national iconographic recognition for the company. Target aimed to have the bull's-eye join the ranks of McDonald's "golden arches" or Nike's "swoosh" logos, and it succeeded. The campaign ended up yielding a 96 percent awareness of the bull's-eye logo among consumers. The company continued to make the logo a feature of all of its campaigns in all media, reinforcing the connection between the logo and the store.

The success of this campaign, and of others in the interim, allowed Target to feature only its logo, without its name or any other identifying text, in the ads it placed in the New Yorker. The criteria for the illustrations were simple: each ad could consist of only the three colors black, white and red; each was to feature a New York theme or location of some kind; and each needed to feature the Target logo somewhere in the ad. Beyond that the 21 illustrators were allowed to pursue their creative impulses in designing the content of each ad. In what was an unusual move, the agency did not contribute to the look or feel of any of the ads but was responsible only for hiring the illustrators and thereby shaping the overall stylistic mode.

SINGLE-SPONSOR ADVERTISING

In the early days of both radio and television entire shows were run under the banner of a single advertiser. Ford Theater, General Electric Theater, General Mills Radio Adventure Theater, and Kraft Music Hall were just a few of the programs whose entire content was "brought to you" by one company. As television increased in popularity beginning in the 1960s and as broadcasters became more powerful, the price of advertising on television skyrocketed, and eventually sales of single 30-second spots became the norm. In the fall of 2005, however, despite the enormous costs involved, a number of companies gambled on the relative "newness" of the idea and bought all of the ad spots during a number of shows, including CBS's 60 Minutes (Philips Electronics), NBC's The Tonight Show (Chevrolet), and FX's Nip/Tuck (Sony Pictures). At upwards of $2 million for a complete program, these companies were betting that saturating the airwaves with their products would catch the attention of viewers in a way not seen for two generations.

No single ad looked like any other. The ad by Andre Dubois, for example, featured a drawing of a giant high-heeled red shoe, decorated with white Target bull's-eyes, that was positioned over the water as a bridge or gateway into lower Manhattan. Another, by Milton Glaser, depicted a series of flying red bull's-eyes emerging from the distant night sky and leading up to and encircling the spire of a skyscraper in a cosmic version of the game of ringtoss. The first 19 pages of the magazine featured 10 pages of Target ads, 7 of them a full page, and within these 10 pages the Target logo was featured more than 200 times. In all there were 21 pages of ads in the magazine's 90 pages.

Some of the artists chosen, most notably the illustrator Robert Risko, were regularly featured in the New Yorker as part of the editorial content rather than the advertising. This fact alone generated controversy among industry insiders who felt that Target, with the tacit approval of the New Yorker, was blurring the line between advertising and content. None of the ads was labeled as such, and there was no explanation of the single-sponsorship phenomenon anywhere in the magazine. In fact, the only text devoted to the ads at all came in a sidebar on page 87 that stated, "Our thanks to all the talented illustrators who brought this project to life," followed by a complete list of the illustrators and the pages in the magazine on which their work could be found. Referring to the advertising blitz as a "project" contributed to the outcry from the likes of Lewis Lazare, who wrote in the Chicago Sun-Times that the advertising ploy was "the most jaw-dropping collapse of the so-called sacred wall between editorial and advertising in modern magazine history." Despite his distaste, Lazar could not help but give a nod to the actual efficacy of the ads: "Target … has had its image immeasurably burnished by the practically seamless blending of its ads into The New Yorker editorial product."

OUTCOME

Industry experts estimate that Target spent between $1.1 and $1.3 million for the ad space alone, and according to most analysts Target got its money's worth. "On a simple, immediate level, the campaign worked because it [was] sufficiently unusual to have the disruptive, first-mover advantage that is central to many of today's best campaigns," wrote Jonah Bloom in Advertising Age. By attaching itself to a "high-brow" magazine such as the New Yorker and by creating ads that were promoting nothing but an artistic sensibility and a logo, Target created a whirlwind of media attention. Overall, the reaction in the national press was positive. The ads themselves were praised for their tasteful imagery, understated message, and creative diversity. Barbara Lippert wrote in Adweek that Target's sponsorship of the New Yorker was "the most exciting example of branded entertainment I've ever seen." The New York Times, the Boston Globe, and the San Francisco Chronicle joined the chorus of supporters. At the other end of the spectrum, although much in the minority, was Edward Wasserman, who held that "the bottom line is that The New Yorker's deal with Target transformed the look and feel of the country's most highly regarded magazine into a promotional vehicle for a retail chain." This last comment betrayed the double-sided nature of Target's sponsorship of the New Yorker. Many of those who held the magazine in high regard found the ad buyout by a discount retail chain a sullying move for a literary icon, while those who viewed the retailer positively to begin with were more likely to find the ads both provocative and tasteful. In either case both readers of the magazine and readers of the national press were treated to what every advertiser hoped for—a heavy dose of media attention.

By the time of the publication of the New Yorker issue, Target had 5 stores in New York City, although none in Manhattan, and 53 in the New York metropolitan area, plenty to choose from for those consumers whose curiosity was piqued by the ads. Beyond New York, however, the ads contributed to an increased, albeit enigmatic, awareness of Target among the magazine's mostly affluent, urban readers and sparked a months-long debate in the media over the artistry and ethics of such an approach.

TAKE CHARGE OF EDUCATION CAMPAIGN

OVERVIEW

With more than 860 stores and sales of $20.4 billion, Minneapolis, Minnesota-based Target in 1998 pursued a broad-based advertising and marketing effort designed to further an upscale image and bring in wealthier consumers. Thus it sought to distinguish itself from other companies in the discount-retail niche, and, in fact, its overall advertising strategy made it a standout: in line with the policies of parent company Dayton Hudson of Minneapolis (since renamed Target Corporation), the retailer had not had an agency of record. Rather, it had pursued a number of campaigns, the most prominent of which was its "Take Charge of Education" program, a television effort largely overseen by Martin/Williams of Minneapolis. Total spending for television, radio, print, and other forms of advertising by Target in 1998 was estimated at $50 million.

With "Take Charge of Education," the company promoted the fact that it would donate 1 percent of all purchases that customers made using its charge card, the Target Guest Card, directly to customer-designated schools, kindergarten through high school, as well as to a variety of other educational initiatives, including scholarships and arts programs. One of the principal offerings of the campaign was a 30-second spot in which a hapless boy played by child actor Alan James Morgan made a mess of customers' cars at a school-sponsored car wash. The humorous commercial promoted the Target program as a more efficient way to give money to schools.

The "Take Charge of Education" program successfully launched Target's school-funding initiative, which benefited local communities while also enhancing Target's brand equity by associating the brand with a relevant cause. The company expanded the program to include a Target Visa card that also made contributions on purchases made outside of Target stores. By 2006 the "Take Charge of Education" program had donated about $155 million to more than 108,000 schools.

HISTORICAL CONTEXT

In 1962 Dayton's, a Minneapolis-based department store chain, opened its first Target store in Roseville, Minnesota. It was a good year for discount chains: Wal-Mart and Kmart, Target's leading competitors, also began business in 1962. From the beginning, however, Target pursued a strategy that set it apart from other discounters, emphasizing an image of high quality alongside its low prices.

Dayton's in 1969 merged with another retailer, Hudson, to create Dayton Hudson. Meanwhile, Target grew rapidly, from four stores at the end of 1962 to a chain of 24 stores eight years later. In the 1970s and 1980s growth accelerated rapidly through acquisitions. With the purchase of a 16-store chain in the western United States, Target in 1971 moved into Colorado, Iowa, and Oklahoma, and purchases in 1980 and 1983 expanded it throughout the Midwest and West Coast, respectively.

In 1990, with 420 stores nationwide, the company opened the first of its Target Greatland stores, which were half again as large as regular Target facilities up to that time. Target stores became even bigger in 1995, with the introduction of the first SuperTargets, 175,000-square-foot units that offered groceries in addition to the items traditionally available in a department store. By the late 1990s, as it expanded rapidly along the East Coast, Target had begun to position itself as a fashionable discount chain, one that appealed to customers whose purchases were driven as much by a sense of style and quality as by price.

The founder of Target's parent company, George Draper Dayton, set the tone for Target's philanthropy. In 1918 he founded the Dayton Foundation, and his family would later commit the predecessor of Target Corporation to donating 5 percent of profits to charity. In fact, his grandsons, Bruce and Kenneth Dayton, who ran the family business in the 1960s and 1970s, were veritable zealots when it came to urging other companies to give back to their communities. Thus, it was no mere marketing ploy for Target in the 1990s to establish the "Take Charge of Education" program, in which the company pledged to donate 1 percent of all consumer purchases on a Target Guest Card to any school (kindergarten through 12th grade) of the customers' choice. In 1998 Target began a marketing effort to promote the program.

TARGET MARKET

From the beginning, Target's image was that of a high-end discounter, with an appeal somewhere between that of dollar stores and bargain basements on the one hand and pricey chains such as Bloomingdale's or Marshall Field's on the other. Certainly a niche existed between these two extremes, and Target sought to fill it by offering customers a pleasant shopping environment. Stores were designed so as to be well lit, with broader aisles than those of a typical discount chain. During the 1990s the company increasingly offered more fashionable lines of housewares and clothing, designed to appeal to a younger, wealthier clientele.

Company surveys had found that the typical Target shopper was about 40 years old and enjoyed a household annual income of just under $50,000. Hence the thrust of its "Grab Your Own Style" marketing in 1998, which, in the words of Lisa Vincenti in HFN: The Weekly Newspaper for the Home Furnishing Network, "downplays [the company's] hallmark bull's eye," a logo associated in many minds with low prices. Instead, Sunday newspaper inserts in May 1998 "sent a new message to American households: contemporary, sophisticated, and coordinated home decorating ideas." As Vincenti noted, customers had come to jokingly refer to Target as "Tar-jay" or "Tar-zhay," with a French-style pronunciation to indicate its newer upscale image.

According to Jeffrey Arlen in Discount Store News, Target was at the front end of an industry-wide move "to change the long-time retailing mantra from 'location, location, location' to 'image, image, image.'" As Arlen observed, "No mass merchant has taken this concept to heart with more sincerity than Target Stores. By coupling clever, sophisticated advertising with sharp on-trend merchandising in a mutually beneficial way, it can be argued that the store has successfully created a niche of its own." An industry executive told Arlen that Target "truly understands the importance not just of merchandising … but of combining the merchandise with marketing for their customers … No matter what your income demographic, there is no negative to shopping in the Target stores."

COMPETITION

The largest retail chain in America, and the largest retailer of any kind, was Wal-Mart Stores, which in 1998 had an annual budget of $172 million in measured media—more than three times Target's advertising budget. Far behind the massive Arkansas retailer was Kmart, putting Target in third place, well ahead of J.C. Penney and the ailing giant Sears Roebuck. Significantly, in December 1997 Sears hired Robert Thacker, former vice president of marketing for Target, to run its strategic marketing and promotion.

According to Bob Geiger of the Minneapolis-Saint Paul Star Tribune, Thacker was responsible for the "seamless" look of Target's marketing, a feat in itself since the company had accounts with more than a dozen advertising agencies and other creative sources. Thacker's move to Sears came at a critical time for that company, which sought in part to imitate Target's winning strategy: as with Target, Geiger wrote, "image is an equally critical issue for Sears, which has attempted in recent years to lure more upper-middle-class shoppers to its stores."

TARGET ON THE WASHINGTON MONUMENT

In January 1999 Target ran a full-page ad in USA Today showing the Washington Monument alongside the company's well-known bull's-eye logo. This followed advertising for American Airlines using photos of natural wonders in Utah as well as scenes from the Great Smoky Mountains National Park, all of which prompted Mark Johnson of the Seattle Times to write, "Corporate advertisers have cut deals to use national monuments in ads that, at first glance, look like Smokey the Bear has sold his soul."

In fact both ads promoted preservation of monuments, and indeed both Target and American Airlines—along with other companies using similar advertising—had donated millions of dollars to the nonprofit National Park Foundation. Target, for instance, had made a gift of $6.5 million for the restoration of the Washington Monument. "It's kind of a two-pronged win for us," Target spokeswoman Carolyn Brookter told Johnson, "being able to help a good cause and get the visibility." This type of "cause-related marketing" began in 1984 with advertisements for American Express that noted that for every time consumers used their American Express cards, the company would donate a small percentage of their purchases to the restoration of the Statue of Liberty.

Foundation rules, along with federal guidelines, dictated that tobacco manufacturers, liquor companies, and corporations involved in litigation with the Department of the Interior were not allowed to use national monuments in their advertising; furthermore, use of corporate logos should be limited. These rules, Johnson wrote, "may seem a little silly given the commercials that already exist, such as the Statue of Liberty picking up and admiring an Oldsmobile or the United Airlines ad depicting a Thomas Jefferson statue pulling a carry-on suitcase."

Target pursued a strategy of keeping prices lower than those of Sears or Kohl's Department Stores, another strong competitor, but higher than Wal-Mart's or Kmart's. It also increasingly pursued a strategy of providing a whole range of furnishings, just as Sears, Montgomery Ward, and J.C. Penney had once done. Target, with its line of housewares designed by architect Michael Graves, went head to head with Kmart's Martha Stewart collection—and with the offerings of high-end retailers such as Pottery Barn, Crate & Barrel, and Bed Bath & Beyond. Hence a retail consultant's appraisal of the last-named retailer's reaction to Target's massive "Grab Your Own Style" promotion, as quoted by Vincenti in HFN: it "runs right into their underwear."

MARKETING STRATEGY

In the late 1990s Target's marketing seemed to be everywhere. Thus the company in 1997 moved increasingly into a relatively new field, running a 90-second commercial aired in movie theaters nationwide. Such advertising was much less expensive than airing a traditional television spot, and with the increasing segmentation of the television market, it helped the company reach sometimes elusive consumers. Yet even Rod Eaton, Target's national director of sales promotion, professed surprise when a Target spot actually drew cheers from a movie audience. After all, audiences who had paid as much as $8 for a movie ticket might be inclined to consider commercials an intrusion. The spot, created by HMS partners, featured "a blonde woman in a 'North African' bazaar," according to Diane Richard of Minneapolis-St. Paul CityBusiness, "who exchanges a mysterious note for a package that, lo and behold, contains chocolate chip cookies, a note from Mom, and a Target Sunday circular."

Target also pursued joint advertising with other companies, a strategy already adopted in 1997. Thus it teamed with Revlon and Hachette Filipacchi Magazines, Inc., for an advertising supplement to the December 1998 issue of Elle magazine. The nine-page section, entitled "C'est Target," showed models wearing Revlon cosmetics and clothing from Target. In November 1998 Target joined Columbia TriStar Television Distribution (CTTD) in a $10 million cross-promotional deal tied to the variety talk show Donny & Marie, starring singers Donny and Marie Osmond. In part through Target the Family, its in-store publication, the company heavily promoted the Donny & Marie tie-in.

December 1997 had seen Target's first-ever network television special, Snowden on Ice, which aired on CBS. The show was built around a snowman character, and throughout 1998 Target promoted Snowden spin-offs such as a $15 plush toy. More Snowden marketing followed at Christmas of 1998, along with a 30-second Christmas spot created by Peterson Milla Hooks of Minneapolis, the latter featuring the Rosemary Clooney song "Come On-a My House."

A number of these campaigns were tied in some way to Target's community-service efforts on behalf of schools. The latter was most forcefully promoted in "Take Charge of Education," for which Martin/Williams had created a spot called "Ding Dong" in 1997. "Ding Dong" starred Morgan, who went from door to door selling products that ranged from candy bars to birdseed in order to raise money for his school. Morgan had "charmed viewers with his nervous sales pitches," Aaron Baar wrote in Adweek, and in a 1998 spot the boy was shown to be "up to the same old tricks … working at a school car wash, backing one car into another and soaking everything." According to Baar, "His bumbling antics and commentary … are intended to remind viewers that Target's Guest Card … is an easier way to support education."

"Take Charge of Education" became a mainstay of Target's community-outreach programs. It was expanded to include a school-uniform program in which Target credit-card holders received 10 percent off, and in 1999 the company worked with Golden Books Entertainment on the "Read-In" literacy program, which provided books for children to read in Target stores while their parents shopped. For its part, Target produced nearly 100,000 flyers about the program, which were distributed to elementary-school teachers. In 2001 Target introduced a Target Visa card, aimed at customers who preferred not to carry several charge cards. Target took advantage of the new card to benefit the "Take Charge of Education" program. As with the Target Guest Card, by using the Target Visa for purchases at Target stores, customers donated 1 percent of the total to the school of their choice, but in addition, purchases on the card outside of the store also resulted in a one-half percent donation to the school. Target sweetened the pot even more in 2005 with the "Twice as Nice for Your School" promotion. All program donations were doubled on purchases made from July 24 through September 10, 2005. The concept was also extended to another Target charity. All health-related or pharmacy purchases resulted in a donation to St. Jude Children's Research Hospital, the United States' largest center for treating children with pediatric cancer and other serious illnesses.

OUTCOME

The "Take Charge of Education" program and the marketing effort behind it were successful on a number of levels. From the time the program began, in 1997, through 2006, Target donated in excess of $154 million to schools and other educational programs. All told, 9 million Target customers enrolled in the "Take Charge" program, and more than 108,000 schools received twice-yearly checks from Target to be used in any way they chose, whether it be for books, basic supplies, computers, or grants. Not only was the program worthwhile philanthropy, but it also served Target's business interests. Target officials were, however, generally reluctant to boast about the program, and it was clear that charitable giving had been part of the corporate culture for decades. Frank Clancy of the New York Times reported, "Internal research showed that customers enrolled in this program spent significantly more at Target than other charge card customers." Moreover, Target's commitment to education and other charitable causes helped to elevate its brand, creating value that was likely worth far more than what the company donated. Finally, the "Take Charge of Education" marketing campaign succeeded on a creative level. In October 1998 ad agency OptionOne was recognized in Promo magazine's annual World PRO Awards of Excellence for its "School Fundraising Made Simple" and "School Connection" programs, both tied to "Take Charge of Education."