How AI gives Hershey an edge for high-stakes Halloween season
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NEW YORK — Candy marketers are nearing the finish line for their category’s annual marketing blitz as people stock up on sweets for trick-or-treating. The key Halloween sales period brings both opportunities and challenges for legacy companies like Hershey that carry wide household penetration but are contending with gaps in outreach strategies that prioritize reach, executives shared during an Advertising Week New York panel Wednesday.
“We actually did a heat map of the United States. The entire impression load was in five U.S. cities,” said Vinny Rinaldi, head of U.S. media for CMG and salty snacks at The Hershey Company. “If you’re buying everybody with a mouth, but you’re only speaking to five cities, you’re missing everyone between LA and New York, pretty much. There’s a lot of people there that eat chocolate.”
As the maker of products like Kit Kat and Reese’s Peanut Butter Cups looks to refine its media buying and planning, artificial intelligence (AI) is helping shift focus from oversaturated markets to those that are often underserved, such as Topeka, Kansas. Hershey and fellow Advertising Week panelist HP have been working with Chalice Custom Algorithms, a four-year-old AI services provider that builds bespoke algorithms that help brands manage programmatic efforts on top digital platforms. A greater degree of precision is especially high stakes this season amid a flood of political advertising hitting what are often quieter pockets of the country. The U.S. presidential elections will be held Nov. 5, less than a week after Halloween.
“We have to make sure we’re taking in all these different signals to make sure … we’re not driving up the value of every impression to be astronomical,” said Rinaldi. “There’s an influx of media this year, so having the algorithm built out allows us to really take all that into account so we’re not overextending during an election year.”
High-stakes Halloween
Even in non-election years, Halloween has an outsized impact on the candy business. Failing to hit sales goals can reverberate into the months ahead and affect future holiday campaign plans.
“Markdown day is the worst day in our business because it created waste. Not only does it create waste, but if you don’t reach certain thresholds by every single retailer, they buy less next year,” said Rinaldi, alluding to Nov. 1, when many shops apply steep discounts on unsold Halloween candy.