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Zellers’ social media campaign featuring its teddy bear mascot, Zeddy, helped rake in $8-million in sales.John St.

Every good CEO wants the company's advertising to kill the competition. But it is rare in an ad agency's meeting with a client for actual slaughter to be on the table.

But last year, with the news out that discount retailer Zellers Inc. was going out of business and many of its leases sold to U.S. giant Target, chief executive officer Mark Foote had a slightly darker sense of humour than usual. In a meeting with Zellers' agency, John St., there was talk of having the sweet teddy bear mascot, Zeddy, go feral on Target's mascot, a dog named Bullseye .

Zeddy never did attack the pooch, for various reasons (not the least of which being the legal nightmare that would surely ensue) but it showed the agency how open their client was to new ideas. Now, as Zellers enters the final weeks of a surprisingly successful social media campaign, it has been feted at Advertising Week in New York, and its business results have demonstrated why other marketers might want to consider shaking things up. With very little investment, Zellers has driven more than $8-million in sales linked to digital coupons and social media promotions, exceeding its targets for the year. All this by being forced to pursue fans in the lower-cost social media world it had always avoided in favour of more familiar means.

The campaign began last November. Zellers had to continue to move product for months to come – profitability was still very important to parent company HBC – but could not afford a big traditional media buy. Instead, it built a Facebook page from scratch and launched a Web video in which Zellers' " Executive Managing Director " – an official-sounding title that meant essentially nothing – gave up on the company. He complained about the U.S. entrant, refused to wear pants to work, and turned over the holiday sale to customers by allowing them to record their own radio ads and vote via Facebook on which items should be discounted and even in-store music .

To make itself heard on social media, it has had to shift the tone of its ads to incorporate the kind of sarcasm and humour that tends to convince non-captive online audiences to sit through an ad. Prior to the "Festive Finale" campaign, Zellers' advertising had been earnest, putting products at the centre of the TV spots in a bright, cheery style similar to what Target was doing in the States.

"It was traditional in approach. TV, radio, flyer, some newspaper. When that was literally not an option, it forced them into the digital space," said Angus Tucker, partner and co-creative director at John St.

They now know that it worked. Zellers had its most successful fourth-quarter results in a decade, with profitability up 16 per cent compared to the previous holiday period. And that was on a shoestring: Its budget was just $400,000 at a time when big retailers are typically spending upwards of $20-million on their holiday campaigns. This week, the Festive Finale campaign won Gold in the social media marketing category at the IAB Mixx Awards at Advertising Week in New York.

When a coupon misprint created a backlash against Zellers in late 2011, the agency responded with another Facebook campaign called the "12 days of giveaways," giving out prizes. It brought 20,000 new fans to the page. It was not just about collecting "likes"; Zellers was building a platform to communicate with customers about future sales and store closings.

Another campaign began in March, called the " Memory Showcase ," which allowed customers to submit stories that happened in Zellers stores, and had the Executive Managing Director act out some of those stories in a series of videos. The final major video was posted last month, to launch the liquidation phase of the campaign. The tuned-out executive drives poor Zeddy out to the woods and abandons him there . The message: "Everything must go."

The humour made the videos more shareable online, and prevented the chain's marketing from descending into a funereal tone. Before the campaign started, Mr. Foote speculated it might become a case study in how to bow out. Now he believes it should be a model for other retailers to consider a major change in how they advertise.

"You can carpet bomb the market with flyers, which is what every retailer does. But the reality of how many of them get tossed in the recycling bin, would be pretty alarming for the people who control those budgets," said Mr. Foote, who left Zellers in February after 33 years in the retail sector, and is now chief executive officer of industrial distributor Wajax Corp. "We always call flyers in retail, like an illicit drug. You know you shouldn't use it but you can't kick the habit."

Research has shown that social media activity can translate into real purchasing behaviour: Shoppers associated by coupons to the Facebook community on average spent 2.5 times more money per store visit than non Facebook fans.

"We're going into a whole new era where we've got these U.S. retailers that are coming to Canada. Everybody's going to have to put their A-game out there. If there's an investment in social media, we've seen, you can get great insights into your customers," said Jennifer Zedic, director of marketing at Zellers.

But that does not mean traditional advertising has no place. The executives at John St. say they wish they'd had the budget to put some of these videos on television as well, and support the campaign with more media. But many clients are still wary of social media, something not just ad agencies, but savvy marketers, believe needs to change. Mr. Foote says he wishes Zellers had done this kind of thing years ago.

As for Zeddy, his video is promoting clearance sales, but there is also a contest to adopt him. The top three submissions will be turned into videos – likely the last ones John St. will shoot for the company. (The executive managing director, meanwhile, is off to Chile to find himself.) Zellers staff are already slowly taking over management of the social media pages, which will eventually be shut down.

"Zellers was an incredibly fun place to work. It was that inherent attitude ... that made that campaign possible," Mr. Foote said. However, he has one clarification, in case it's necessary.

"We never went to work without our pants on."

Curb appeal

1,900: The number of submissions that have come in from people and organizations looking to adopt Zeddy. Proposals have included having him call out numbers at a bingo hall, and installing him as a guard bear at an auto wreckers' yard.

137,052: The number of fans Zellers has accumulated in 13 months since joining Facebook.

9,000: The number of new fans Zellers won in the first three weeks after launching the Zeddy "everything must go" video.

750,000: The approximate number of views of all the campaign videos on all online platforms in the past year. John St. used "seeding" – outreach to bloggers and other influencers – to help get the videos noticed online and passed around on social media sites such as Facebook and Twitter. The agency believes seeding accounts for roughly 200,000 of those views.

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