Gap Launches Jeans Campaign

The Gap debuts its most expensive ad campaign ever Wednesday on the heels of its successful khaki push, which may have helped Gap Inc.'s stock gain 40 percent since late April.

The new "Original Fit" jeans campaign features, in four separate spots, musical appearances from blues guitarist Kenny Wayne Shepherd, rappers Missy Elliott and Run-DMC, and jazz veteran Herb Alpert.

The company, which also owns the Banana Republic and Old Navy chains, said the new Gap campaign would be its most expensive ever, but it declined to reveal specifics. Industry estimates indicate that the company has tripled its advertising spending so far this year. At its current pace, it will spend $220.5 million on Gap advertising this year, up from about $73.5 million in 1997, according to the tracking service Competitive Media Reporting.

The new campaign, aimed at the back-to-school season, follows the Gap's spring ad push for khaki pants.

Kindra Hix, a retail analyst with NationsBanc Montgomery Securities in San Francisco who believes the khaki ads sparked the company's Wall Street gains, said those ads are "definitely fueling traffic" at Gap stores.

"They're following through on the ads with good in-store presence of khakis," Hix said. "They're reinvesting in the brand."

Whether the new campaign will help the stock maintain its upward trend remains to be seen, said David Tuong, an analyst with Argus Research in New York.

"It looks like a successful campaign," Tuong said. "Their campaigns are usually very good."

Within days of the Gap khaki campaign's debut in late April, the company's stock price jumped to 52 from about 46. It rose at a steady clip through May, June and July to about 65.
It has given up some ground in past days and has been trading between 62 and 63 this week. On Tuesday afternoon, the stock was down 3/8 to 62 1/2.

Since late April, the Gap has roughly doubled the gains of the S&P retail index, which has climbed 20.3 percent over the same period.

The ad that had the most airtime in the spring campaign was Khakis Swing, directed by photographer Matthew Rolston. It featured two couples breaking away from a crowd to demonstrate swing techniques to the vintage sounds of Louis Prima. It was seen as a savvy spot because it tapped into growing interest among younger consumers in 1940s culture.

To be sure, ad campaigns get stale, and companies that don't keep reinventing their marketing efforts can see booms fade.

Although the Gap has boosted advertising spending, it could face stiffer competition from chains such as The Limited, a direct rival to Banana Republic.

Gap ad spending nearly doubled in 1997, up from $38.6 million the year before, according to Competitive Media Reporting.

The company spent $31.1 million on media space for Gap ads through April, nearly a threefold increase over the $10.9 million spent in the first four months of 1997.

The four new TV ads employ he same white background from last year's "Easy Fit" pants push, as well as the company's 1970s tagline, "Fall in to the Gap."

Television commercials will be aired during such programs as Melrose Place and Dawson's Creek, as well as on MTV and VH1. The Gap will also run radio ads and eight-page inserts in major magazines. Its outdoor advertising presence, to include billboards and building banners in 24 cities, will be larger than in the past.

Most of the ads are aimed at the Gap's core 18- to 24-year-old target market, but the ad featuring Alpert may appeal to older viewers, a company spokeswoman said.

Unlike other major consumer-brand companies, Gap Inc. has no advertising agency. Campaigns are produced by the company itself, under the direction of Michael McCadden, executive vice president of marketing.

"We do our advertising in house," explained spokeswoman Rebecca Weill, "because we think we know the brand best and can be most innovative and creative, as well as move at a fast pace."

By Steve Gelsi, CBS MarketWatch