Cold Medication Brand Zicam Ditches Upfront, Takes Full Programmatic Plunge

Originally posted in The Wall Street Journal

Cold remedy specialist Zicam is coughing up some dollars for programmatic advertising.

The consumer brand, which markets itself as a pre-cold remedy, has torn up its traditional media strategy this year as it looks to fully embrace programmatic advertising online and data driven advertising on TV, along with digital radio and even digital billboards.

In a sign of its new approach, Zicam sat out the TV upfront this year, electing to quadruple its digital budget while moving ad spending to hyper-targeted TV. The thinking: Zicam’s advertising strategy is contingent on the cold and flu season, which hits with varying intensity in different parts of the country, so mass marketing through traditional media no longer makes sense.

Missing out on Zicam’s $15 million ad budget probably won’t make TV executives sweat. But the company’s daring media rethink may portend broader changes in the ad business. If the brand succeeds, and enough other advertisers whole-heartedly embrace its tactics, it could serve as a harbinger of a shift in ad spending.

“Our go-to-market strategy over the past 15 years or so has always been pretty standard: classically trained brand managers doing what they are trained to do,” said M’Lou Arnett,CEO ofMatrixx, Zicam’s parent company. “Now, we are trying to be much more responsive to the market and flexible,” she added. “This is what a brand needs to do in 2014.”

This year, Zicam is pumping money into Xaxis, GroupM’s programmatic trading desk. Using half a dozen data sources, including five years’ worth of cold and flu data from the researcher IMS Health, Xaxis will plot out a digital media strategy designed to kick into gear as soon as cold season does. Zicam is aimed at people who are just exhibiting cold symptoms and are looking to stave off a full-on cold bout. Thus, timing is everything. “This business requires us to be data driven,” said Jordan Redenor, CEO of Zicam’s creative agency, Protagonist.

Besides timing, Xaxis will use data to target likely cold remedy shoppers, based on everything from people’s recent search and social media action (i.e. when people are Googling or Tweeting about getting colds), to their age, sex, location, as well as Zicam’s own customer data.

“This is about when and where you should advertise,” said Alex Block, Audience Strategist at Xaxis. “And they are really going to try everything we do.” That includes display and video ads, mobile, even tablet ads synced to TV spots.

Speaking of television, Zicam has enlisted Simulmedia, which claims it can help marketers find precise audiences on specific TV shows that go well beyond basic demographic targeting. According to Simulmedia CEO Dave Morgan, the company has partnerships with two broadcast networks and over over 80 cable networks – though he can’t say which ones.

In the case of Zicam, Mr. Morgan says Simulmedia is going to zero in on individual TV shows that reach high concentrations of Zicam’s key targets (such as women with children who make household purchases) using a combination of consumer shopping data from GfK MRI, Nielsen ratings data and set top box data from “nearly every MSO,” he said. Roughly 70% of the Zicam campaign will be on national networks, with rest running locally, Mr. Morgan said.

Like Xaxis, Mr. Morgan is waiting for cold and flu data to tell him when to kick off the TV campaign. “This is an acute manifestation of what we heard in the upfront about brands wanting flexibility,” he said. “Digital has taught us the closer you buy [before an ad runs] the more effective you can be.”

Still, how is Zicam going to prove all this works? After all, isn’t programmatic advertising best suited for e-commerce, where you can immediately gauge return on investment? Well, each Zicam ad will feature a call to action, such as a coupon, aimed at driving people to stores. Ms. Arnett acknowledges that tracking the impact of TV ads on coupon redemption in stores isn’t perfect. But she’s more than willing to take a big leap toward a data-driven media future.

“This is a big step for this company,” said Ms. Arnett.

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