On Jan. 29 six women converged on a brick, single-story home in Franklin Park, Ill., a working-class town about 14 miles northwest of downtown Chicago. As the temperature outside dipped below freezing, hostess Melanie Lindsey, 28, urged her guests to sample the Moscato white wine, savor the chocolate-dipped macaroons and bowls of candy hearts, and enjoy the party favors: an array of Durex condoms and lubricants.
That night, Durex sponsored some 5,000 condom bashes across the U.S. called "Durex Girl Talk House Party: Valentine's Day Edition." They were actually organized by the marketing firm House Party, which specializes in home product shindigs, a tried-and-true marketing strategy that dates back generations. At the Franklin Park gathering, Durex may have won a convert. Although "Trojan (CHD) seems to be the go-to brand," said attendee Sarah Harper, the array of coupons, free samples, and customized beverage can sleeves trumpeting the condom maker's brand might tempt her to switch to Durex, a unit of Britain's Reckitt Benckiser Group. Reckitt declined comment for this story.
House Party's services are in demand these days. While the Irvington (N.Y.)-based outfit declined to provide specific figures, Chief Executive Officer Kitty Kolding says the number of gatherings it planned doubled in both 2007 and 2008. And over the past 18 months, she says, House Party has added Anheuser-Busch InBev (BUD), Hasbro (HAS), and McDonald's (MCD) to a client roster that already included big consumer-focused marketers Kraft Foods (KFT), Procter & Gamble (PG), Ford Motor (F), Mattel (MAT), and Sony (SNE).
Kolding says House Party has a database of about 900,000 potential hosts, who fill out online demographic profiles and compete to throw the product parties. Other than getting to share in the evening's array of corporate swag, they're not compensated. "Hosts feel like they've won," she says, "like they've got a backstage pass to the brand."
Corporate clients are willing to pay House Party an average of $250,000 for 2,000 parties because the company's staff uses such criteria as age, ethnicity, and breed of family dog to select the hosts best suited to talking up a certain product or brand, according to Kolding. That level of targeting is nirvana for those pitching consumer products—but often tough to achieve using conventional marketing.
Big brands are eager to reconnect with consumers after losing ground to private labels, which as of October had grabbed 22.3 percent of the U.S. market, according to market researcher Nielsen (NLSN), up from 20 percent before the recession.
While companies such as Kraft, P&G, and Kimberly-Clark (KMB) continue to pour money into TV and Web advertising, they're mindful that consumers are programmed to "resist the sales push," says Ronald C. Goodstein, a marketing professor at Georgetown University. "The advantage of word-of-mouth is if I'm giving you a personal recommendation because we're friends, you don't counterargue that." The downside, he says, is that partygoers may find brand-sponsored fetes a turn-off and wonder if their friends have sold out for the sake of some coupons and freebies.
Although the efficacy of this kind of bottom-up, buzz marketing is difficult to measure, companies will spend an estimated $2.2 billion on word-of-mouth marketing this year in the U.S., according to researcher PQ Media. That's 43 percent more than in 2008.
Kraft, which in November attracted more than 20,000 people to parties celebrating the company's Nabisco Nilla wafers cookies, plans to hold at least 25,000 brand bashes this year. The parties are "more cost-efficient" than television commercials, says Kelley Woodland, who runs consumer relationship marketing for Kraft's North American division.
House Party's Kolding is looking forward to the company's next string of branded festivities, including a gathering celebrating Schwan Food's Freschetta pizza, timed to coincide with the Academy Awards broadcast on Feb. 27. Then it's diapers and dancing for Kimberly-Clark's Huggies brand. The company is already touting the Pull-Ups "Potty Dance Day" House Party on Mar. 5, where hosts will get dance mats and a DVD, coupons, and coloring sheets. The evening's entertainment: Toddlers and parents alike will groove to a streamed concert of The Potty Dance by the children's rock band Ralph's World.
The bottom line: To combat growing interest in lower-priced house brands, consumer-products makers are using in-home parties to build buzz for their goods.