The Worst Advertising Campaign Ever?

ads, business, humor, lessons learned, travel, United States 4 Minutes

During the early 1980s, the Hoover appliance company held a 50% share of the UK market and was rapidly expanding with the potential to claim a larger share of a growing market. This period of expansion, however, coincided with the UK’s entry into a major economic recession, and Hoover was beginning to face competition from newly established British vacuum companies such as Dyson. From 1987 to 1992, Hoover’s profits fell from $147 million to $74 million, and their share of the UK vacuum cleaning market dropped.

In an attempt to get things back on track, Hoover’s executives decided to create an exciting marketing promotion that would encourage the public to purchase its products. In order to do this, Hoover offered free round trip airline tickets to six European destinations to individual customers who had bought at least £100 worth of Hoover products.

There was a basic problem with the campaign, however.

The most popular Hoover product that met the £100 requirement was the Hoover Turbopower Total System vacuum. It sold for £119.99. Hoover made a profit of about £30 on each sale. Tickets from the UK to anywhere in Europe cost well in excess of £30, so how on earth did the company think this would help its bottom line?

Hoover knew such a strategy would at least increase sales, and hoped that not everyone who qualified for the free tickets would actually pursue getting them.

Hoover also made the application process as arduous as possible in the hope that only a minor percentage of those who bought an appliance would get the flights. To attain the minimum amount of free tickets given away, the following strategy was put into place:

  • When a customer purchased a Hoover appliance for at least £100 at certain select department stores, they had to mail in their receipt along with their application within 14 days of making their purchase.
  • Hoover then sent back a registration form which needed to be completed and returned within 14 days.
  • Hoover would then send out a travel voucher. The customer then had 30 days to choose three combinations of departure airports, dates and destinations.
  • Hoover retained the right to refuse the combinations selected by the customer, subsequently insisting that the customer select a further three alternatives.
  • Additionally, Hoover reserved the right to also refuse the alternatives and offer a combination of their own choosing. This meant that the customer’s flight would take place on a date and from a location that was likely to be inconvenient, rendering the customer less likely to use the tickets.

Hoover’s slogan for their new promotion was “Two free flights! Unbelievable!”, and it was wildly successful. Hoover products flew off the shelves. A sufficiently-small number of airline tickets were successfully redeemed and the company’s profits were steadily moving in the right direction.

Because of the success of the campaign, the company decided to go even bigger.

On November 1, 1992, Hoover expanded its free ticket offer to include free flights to the United States.

Department stores all over the UK reported scenes of near-hysteria as customers fought with each other in a quest to snatch Hoover products from the shelves. Despite a recession, businesses were unable to keep the Hoover vacuum cleaners in stock. Hoover put its factories on 24/7 schedules, offering employees overtime in an attempt to keep up with the frenzied demand. All told, the sales generated by the campaign were ten times higher than projected.

It turned out that Hoover’s belief that the number of people who would actually seek redemption of the free tickets would be comparatively low — was flawed. The free tickets were precisely the reason for most of the sales. In fact, some customers did not even bother to pick up their orders; they just wanted the free airline tickets.

With only a £30 margin from each sale and a cost of £600 for each redeemed free flight voucher, Hoover stood to lose £570 off of each of these sales. Conservative estimates placed the company’s losses at more than £100 million.

Hoover had no choice but to make the redemption of the vouchers even more complicated.

The company denied thousands of applications on the grounds of being improperly filled out. It sent out request forms on Christmas Eve, hoping to increase the number of customers who would fail to meet the 14-day deadline for the return. Flights that it offered departed on the other side of the country from the residence of the customer.

Consumers rebelled, and after years of litigation, the company was ordered to pay about £57.5 million toward airline tickets for over 200,000 customers. That still left over 300,000 customers who received nothing.

By 1995, the company’s market share had plummeted from over 50% of all UK sales to less than 10%. It went from being one of the most trusted brands to being voted “least reliable” in several consumer reports.

In 2004, the BBC made a documentary, ‘Hoover Flights Fiasco’ as part of the Trouble at the Top series. The show was watched by 1.7 million viewers. As a result, the British Royal Family withdrew Hoover’s Royal Warrant — a high mark of endorsement, signaling that a company can be trusted.

Another unforeseen problem was that sales were not going to pick up any time soon. As a result of the frenzied purchase of so many vacuums, the consumers had a glut of machines that were purchased just for the free flights. A booming second-hand market emerged, as individuals unloaded their vacuums to others. As a result, there was virtually no demand for the new machines that gathered dust on the shelves.

How could something like this happen? The problems seemed glaringly obvious from the start.

My guess is that perhaps incentives may have had something to do with it.

It may be that the sales and marketing people were simply responsible for generating sales, and not at all concerned about the profitability of those sales. So if you’re bonus is tied to increasing sales, then you’ll do whatever you can to increase sales. Now if the accountants had been asked about this campaign before it launched, my guess is that none of this would have happened, and Hoover might still be the dominant name in vacuum cleaners.

But who listens to the accountants?

Now I’m curious to see what kind of promotions the airlines will start offering to encourage people to start flying again.

Hopefully, the airlines, and consumers, have learned the Hoover lesson…

Sources: Wikipedia and Commonplace Fun Facts

*image from Campaign Live

Published by Jim Borden

A 60-something guy trying to figure out the world, and his place in it. Happily married for 40-plus years, three wonderful sons. Accounting teacher, fitness enthusiast, blogger, reader.

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53 thoughts on “The Worst Advertising Campaign Ever?”

  3. Hoover sucks! Airlines,hotels and even tourist-starved countries are starting to offer travel incentives. Cyprus is offering free health care to tourists who qualify for entry and get sick on the island. It would take a better offer than that to get me on a plane under current conditions.

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    1. yes, Hoover sucks, literally and figuratively.

      That offer from Cyprus is almost frightening, in that they are putting the thought in everyone’s might about the possibility of getting sick. On the other hand, it is pretty clever, given that the odds are that not too many people would have to take advantage of the offer…

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    1. Yes, the idea that those customers would buy more expensive products was clearly not researched well enough. It will be interesting to see what the airlines do to get people flying again…

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  5. I don’t even remember this campaign. When I was a child my mother would say she was going to do the hoovering! I have just looked behind the kitchen door and my current vacuum cleaner is a hoover, though we have had various makes and shapes along the way.

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  6. This feels like one of those “if it sounds to good to be true” moments. I am glad to hear that the populous was able to win judgement over some shady sales tactics. I agree this plan would have never gotten past a reliable accountant. It also did not help their market share when Dyson began to innovate the art of vacuuming. Great post with information I have never read before and an interesting story!

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  7. as a former promotions and pr advertising person, this gave me sweats just reading it. i’m going to say you read this exactly right, marketing took over, the accounting side got caught up in the frenzy, no one thought the numbers through, and they way underestimated what people will do for something free, especially such a wonderful incentive, it was all short term thinking, with no projections ahead if they were actually successful, which led to their total downfall. marketing won the battle on that planning day and approval of the campaign day but lost the entire war for the company.

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      1. It was an exciting job, never dull, hard busy work, but so many adventures. Worked very long weeks, entertainment clients, mostly films, so clients were based in la and my, so crazy hours, majority of promotions, events at night and on weekends, publicity and press during daytime, lots of bizarre craziness. I loved the creative side and the craziness, but wasn’t a fan of the corporate side, I wouldn’t trade it all for the world. So many stories. But, after 7 years, I wanted to do something more for humanity and went to grad school at 40 to become a teacher and change my life. Love what I do now and don’t look back, except with fondness for it all.

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      2. that’s great to hear that you enjoyed it so much, but still had the courage to change gears completely to do something more impactful. How cool to go to grad school at 40 and start a whole new career – your students are lucky you left the world of advertising!

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  11. Having lived through the copious media coverage here of this debacle I’m happy to be reminded of it again, as it gave us so much entertainment. I can still recall keeping my fingers crossed behind my back when our Marketing Director asked me if a promotion I was running, which had far exceeded expectations, was ‘going to be another Hoover.’ I said ‘no’ and suddenly became religious 😉

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      1. I think it features in quite a few marketing textbooks now – how not to do it! Ours was a straightforward offer of coupons for redemption of a little gift box, but our mistake was in going for a specially made and branded box. Cost us a fortune in extra factory orders and apologetic letters when it took off in numbers we hadn’t expected! Every request was fulfilled 😊

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  12. Oh the messes one gets into when they don’t seek the advice of a wise accountant. 🙂
    I have been wondering the same thing about what perks the airlines are going to offer to entice people. FREE trips would entice me, as long as I know that I will get to my destination. 🙂

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    1. the world would be much better if people just listened to accountants. And I don’t think the airlines will have a problem getting you places; the question I have is will you be healthy when you get home…

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      2. I’ve got the same problem. I bought a good vacuum a couple of years ago, but it takes work to realize that. No wonder those self-driving vacuum cleaners are so popular…

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  15. what an interesting story … I’m surprised it did not make it into my most memorable text book of marketing mistakes/case studies, written by my (then at UVA) marketing professor Leonard Barry in the 70s, “10 marketing mistakes” … a book I think about often and unfortunately lost and cannot find, even on the internet.

    Thanks!

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