Brands at the Crossroads

On April 24, 2003, PROMO held its second invitation-only roundtable of the year. The conversation among these marketing veterans quickly focused on an accelerating shift toward new branding practices.

JOYCE: Let’s start by talking about the ways in which branding emerges from different marketing disciplines.

WOODS: Advertising, promotions, and event marketing all have different roles, but when you see a campaign such as the breakthrough campaign for Apple Computer [spearheaded by Chiat Day in 1984] that not only effectively presents a brand but also — without overstating it — changes the world. It can open the door for many other companies.

FARRELL: Sometimes we get a little confused in the branding. We tend to think of it in terms of typefaces or colors or how the brand looks — as opposed to how a brand behaves. I think if you look at the really good brands, whether it’s Apple computers or DiGiorno pizza, they always have something in their features and benefits that really show the consumer that they understand their lifestyles. The brands that we may put on pedestals — the Starbucks, the Jeeps of the world — all of them have some sort of empathy for the consumer out there that makes their brand better.

ROSEN: For me, the best brand-building campaigns usually take a leap forward, break some new ground with the consumer. It’s been a while since I’ve seen that kind of breakthrough. If you look back to the programs that broke ground, from the [McDonald’s] Happy Meal to Super Sizing and things that really changed the industry, it’s been a while since something came along like that.

SPETHMANN: As marketing gets more [brand]-oriented, is there a risk that it will lose sight of the offer and the sale, which has been the traditional promotion approach?

ROSEN: That’s what [promotion] brings to the party. If it comes out of an ad agency, the focus is historically more image-based. Our part of the industry can bring sales building, traffic-driving elements to the tactic, and leverage it fully.

In terms of brand-building, I think of the work we did with the World Children’s Day program for McDonald’s. It was one of the first promotions to crack the code on how to deliver a promotion globally and yet have it resonate local relevance.

SPETHMANN: Are there really that many global marketers?

FARRELL: Manufacturers and brands are trying to decide where they want to go. Everybody wants to think global, but everybody is still local, giving markets a chance to stay within certain guidelines as they execute. In India, the marketing has to be different from what you do in Muncie, Indiana, for example.

JOYCE: Jay, is it a chicken-and-egg proposition? Which comes first: The promotion defining the brand or the brand defining the promotion?

FARRELL: It starts with what the brand is and extends it down into tactical/strategic elements.

JOYCE: So you see the process as more sequential?

FARRELL: So much of what we do today depends on borrowed interest. In the old days, programs were designed to “be” the brand. And we would judge programs based upon “Is this the only brand that could do this program?” Now everybody is doing the same programs — who can tie in with the biggest movie, who can get the biggest license? I like Guinness because the company said “We are not going to worry about that; we’re going to do things that are about us.”

McGOWAN: To your chicken and egg question earlier, Kathleen — I don’t see it as linear; promotion is circular. The brand should drive the promotion, but the promotion should reinforce the brand. And if the promotion is about driving volume during a certain period or whatever it’s meant to do, that should be in context with brand equities.

SPETHMANN: Which is really true of all marketing. It’s all about the brand, whatever the marketing message is and why the message reinforces the brand.

McGOWAN: When you borrow equity from someone else to build your brand, that inherently implies that you haven’t defined what your brand attributes are, and you can’t get beyond functional features and benefits so you have to associate with Britney Spears to make your brand relevant to its target. Not that borrowing equity isn’t sometimes the right thing to do, but it has become a scapegoat. It’s easier to be “associated with,” rather than build your own equities.

ROSEN: You can do it in a way that doesn’t eclipse your brand. We recently did some work for Dreyer’s ice cream that tied in with the Girls Scouts and their cookie drive. Dreyer’s developed four flavors based on the cookies. Retailers loved it, the Girls Scouts made money on each sale, and it was a win-win that enhanced both brands.

SPETHMANN: Of course, there have been movie tie-ins that were win-win for both the studio and the product partner — for example, Baskin-Robbins with the movie and video release of Shrek, where the product also became stars. Those tie-ins made sense for what Baskin-Robbins was selling: ice cream.

ROSEN: We launched McDonald’s super-sizing with the Jurassic Park release, and called it “Dino-Sizing.” That’s how the idea of a larger size was launched, but it had legs beyond that movie tie-in that went beyond slapping logos on product.

SPETHMANN: Interesting, that’s the third example we’ve discussed this morning of a promotion that has become the ad platform: Camp Jeep, the Guinness pub and McDonald’s Super-Sizing.

WOODS: I can’t let a discussion of McDonald’s go on without mentioning the impact of Ronald McDonald House. I think it’s brilliant, striking the perfect balance between a relevant tie-in that has remained honest and true to its cause: helping sick kids and their families. It has become its own icon. And it allows local franchisees connect in a meaningful way.

JOYCE: It was one of the first and best cause marketing efforts.

WOODS: Now if McDonald’s would only bring back the fried apple pie…but I still love ’em for the Ronald McDonald house.

FARRELL: We’re spending a lot of time talking about McDonald’s, but I think it is a classic example of a brand that got lost. It used to be a very powerful brand, but it’s been trapped in discounting, like everyone else. What would have happened to McDonald’s if, when all the other fast food competition was cutting prices, it had maintained or raised prices while offering value or new experiences?

There is a parallel. When all the other airlines were cutting their prices, British Airways actually raised prices and enhanced the flying experience with better food, better seating. And British Airways is doing fabulous right now, while the other airlines are struggling.

SMATHERS: I think the diversification of products has also hurt McDonalds. Adding McRibs, chicken sandwiches and a string of unsuccessful salad product, hurt them.

ROSEN: I’m sure everyone has read, though, that McDonalds is moving back to its core equities.

HOLBROOK Of course. That’s what everyone is doing. Have you heard of a single manufacturer in the country of late who’s said “We’re diversifying and reaching out beyond our core, we’re going to break the mold in new ways”? No. In fact, Unilever and P&G are shedding tired brands.

ROSEN: The challenge for us at Frankel [McDonald’s is a client] is to motivate employees as brand ambassadors. We can tie in and price point and market, but if the consumer’s experience is not a positive one, he or she is not going to come back.

HOLBROOK: Isn’t that a life cycle issue? Employees at Wal-Mart are not as helpful as they once were, nor are the employees at Starbucks. On the other hand, we’ve been working with [QSR] Quiznos, and the employees there are excited and motivated to be part of a company that is new and growing. But what happens when that energy runs out?

ROSEN: I think it’s a marketing problem….

HOLBROOK: It is, absolutely.

ROSEN: …And the target audience is the people working in the store.

FARRELL: After all the commercials, all the FSIs, all the other efforts, it all comes down to this: Your brand better behave well.

SPETHMANN: Once a brand has fixed the operational issues that made it lose its way, what else can you do to bring it back?

McGOWAN: Promotion revived Heineken; it used to be thought of as “your father’s beer,” set aside just for special occasions like holidays. But then-VP of marketing, Steve Davis, said the consumption of the beer had to be a special occasion in and of itself. The challenge was to contemporize the product; there was a cool, quirky ad campaign, but promotion really drove that turnaround with younger consumers. A combined effort pushed the brand to middle double-digit growth, of 15% to 16% year after year.

SPETHMANN: Do you have to be working with the No. 1 or No. 2 brand in order to do good marketing?

SMATHERS: I don’t think so. In the wireless community, Verizon and Cingular are tops, but then Virgin comes along and does some of the best marketing in that segment that I’ve seen. They may not be the largest, but they are definitely carving out a space for themselves.

HOLBROOK: Some of my favorite campaigns weren’t brand-centric — like the Barq’s USSR Going Out of Business Sale. What does that have to do with root beer? Or the Taco Bell Satellite Splashdown? That stuff is all fun, and it allows you to push the brand in a way that advertising just can’t. Promotion lets you explore the brand in daring ways.

WOODS: Working with category leaders can also prompt fear in brand managers. The size and scope are greater, with more stakeholders. That creates a different dynamic; players that are third, fourth or fifth in the market can be more ambitious, more aggressive, more risky. And good promotions require us to do something new, something different. Someone running 22%, 25% market share thinks differently from someone climbing up from 8%, who may be just swinging for the fences.

HOLBROOK: It hasn’t always been that way for the big brands. One of the biggest cause campaigns was done by American Express to save the Statue of Liberty — and American Express is so conservative. And Budweiser launched the BudBowl that paved the way for on-TV promotion. But you’re right — that kind of fearlessness among big brands isn’t happening anymore. That may be indicative of the economy.

WOODS: And, while this may not be a popular sentiment, there are too many “smart guys” (and gals) out there. Folks with MBAs, who have to justify their hiring by tinkering with the core brand — but who don’t have the passion that someone like Ray Kroc [of McDonald’s] or Sam Walton [of WalMart] had. It gets back to the relationship between the brand and the consumer, and its honesty.

SMATHERS: Yeah, if you have a “brand steward” who is rotating through for just 18 months, they’ll play it the way they think is safest.

McGOWAN: For a year and a half, they’re P&L managers, and during that time they’re supposed to make sure that Rice Krispies stays on track. If their boss expected a 40% decline, and it comes in at a 34% decline, they’re fine.

SMATHERS: So they’re cereal killers?

WOODS: From an agency perspective, it’s tough dealing with these folks. We may go in with an idea that gets mired in a discussion of the ROI, because they have no understanding of the emotion.

JOYCE: The brands with more consistent management teams have more success?

WOODS: It’s about passion, coming from a person who can say “This is our brand!” That can’t be a temp position. It has to be someone who understands 360 degrees of the brand.

SMATHERS: You know the growth we’ve experienced in recent years has, frankly, come at the expense of advertising; a brand manager looks at the arsenal of marketing tools at his disposal and said “I’m getting my best lift from this FSI. I can’t show anything for the long-term campaigns.” It’s on us is to re-educate the brands as to all we can do.

HOLBROOK: We need to educate our clients that the “R” in ROI can be a qualitative as well as a quantitative measure.

McGOWAN: We’re not advertising, we do need to drive some behavior and measurable results, but we can combine that with attributes that go beyond ROI, which is about sales, not the consumer. If we’re consumer-centric, we’re doing something for the consumer and measuring that.

HOLBROOK: Well, what’s the ROI on Camp Jeep? I guarantee you there is one, but it’s not immediately apparent to the short-term number crunchers.

WOODS: In addition to more emphasis on ROI, we’re also seeing more strain among our clients as they try to do as much or more with less staff. They’re consolidated departments from five or six people to one. It’s much more frantic.

SMATHERS: Then the opportunity is that, with smaller marketing staffs, there’s more we as agencies can do to help them out. We always try to know enough about the brand that we can transcend the brand manager change, and be the ones to get that new person up and running.

ROSEN: We become more an extension of their marketing department because they are just that short staff.

JOYCE: Becoming the branding partner.

HOLBROOK: Our clients have moved from saying “Get me promoted to vice president in six months” to “Don’t get me fired.” There’s a different atmosphere out there. And it’s gone from the chief marketing officer as the cock of the walk to marketing with a small “m,” as the CEO and VP of sales take over. As media has become diluted, marketing isn’t as potent as it once was.

FARRELL: If we’re going to help marketers build brands, we have to convince them that we are more than tacticians.

JOYCE: Given the constraints the marketer is operating under — “marketing with a small ‘m’” — how do you lead the marketer in that direction?

FARRELL: By working with the CEO more closely. But it’s tough to find heroes right now who will say “I believe in branding, in long-term planning, and I’ll stay the course.”

SPETHMANN: Any sense of what’s in line for 2004?

HOLBROOK: More brand extensions and new products, more non-advertising activities, like events. I don’t think we’re going to come out of this economy in the same place we went in. Marketers are thinking differently from now on.

SCHULTZ: I expect hard times in 2004. The recovery is dependent on events outside the U.S. At the same time, the domestic economy is still quite sick. The problem for promotional marketers, is that senior management has decided to solve the problem with cost-cutting, not expansion. They’re in a holding pattern.

Keep in mind that much of senior management in this country has bought into quantitative management, and it’s difficult to demonstrate results in the short-term. Anyone who goes in with a program that has a long-term result is facing managers who say “Hell, I may not be here in six months.” Until they can demonstrate a return on brand, marketers aren’t going to get the money.

HOLBROOK: Then how do you explain the money flocking to the TV upfront? Mass media buys aren’t measureable by the standards you’re describing.

SCHULTZ: Nobody ever got fired for making a TV network buy, even though audiences are plummeting and media is fragmenting. But you’re right: It’s the dumbest business in the world.

SPETHMANN: It goes back to Steve’s earlier point: marketers operate from fear.

SCHULTZ: They should. I’m seeing more money shifted from marketing to the sales force, partly because of the measurability. And that doesn’t help brands a whole lot. More than anything, I’m concerned that the whole marketing function is under attack from senior management, due in part to mismanagement by past marketing executives. Now, in many companies, the CFO has become the de facto head of the organization — and he wants proof that marketing earns its keep.

JOYCE: So the pressure is on for better metrics?

SCHULTZ: Absolutely. Long-term and short-term. While promotion people build brands, both tactically and strategically, they haven’t done a very good job of getting that message across. We’ve fallen into a trap, selling the idea that if you can’t measure it now, it’s not worthwhile.

MANIKAS: Advertising is not the answer anymore. It’s less and less efficient, and other disciplines — especially promotion and public relations — are coming to the forefront. And promotions folks have much more control over the consumer’s experience with the brand.

JOYCE: What gives you cause for hope ?

MANIKAS: Change is good, and hard times force us to change. Budgets are tight, but audiences are more willing to listen to something that will work.

SCHULTZ: We’re beginning to understand this stuff better than we used to — and that’s a start.

A BRANDING BRAIN TRUST

JAY FARRELL
president & regional director 141 Worldwide

Favorite work: Campaigns by Guinness, including the Own Your Own Pub and the World’s Largest Toast. “They may not be the noisiest campaigns, they may not spend the most, but they always stay type-true to what they are. If you’ve been in a bar on St. Patrick’s Day finds it hard not to think of Guinness.”

JIM HOLBROOK
president, Zipatoni

Campaign that set the mark: The Moto-Movement ad campaign for Nokia wireless, which borrowed cachet from the Austin Powers films, was “undeniably great — but it wouldn’t have had the impact if it weren’t for the promotions that put the phones in people’s hands. Ads alone couldn’t do it.”

TINA MANIKAS
SEVP, executive director retail & promotional marketing Draft, Inc.

Work that most surprised her: Employees were so enthused about a client’s new product launch that they were conducting consumer research among other parents at their children’s soccer games — until HR realized the company couldn’t have staff work unpaid weekends.

GEORGE McGOWAN
promotional marketing director, Fallon Intersect

Favorite campaign: Camp Jeep, “because it involves the brand; it’s experiential; and it’s a loyalty reward for being a Jeep owner. Promotion is not about awareness and trial. It is about rewarding loyalty; it is about specific behaviors; it’s about immersing current owners and incenting potential owners.”

BILL ROSEN
EVP, chief creative officer Frankel

Favorite campaign: The BMW films program that blurred the line between advertising and promotion. “The buzz that campaign created in the marketplace was huge, bringing the brand to a younger demographic. Content was presented in a way that you wanted to see, brought to you by the brand.”

DON SCHULTZ
principal, Agora Consulting & professor, Northwestern U.

Forecast: While ad agencies are losing their role as the “definers” of brand identity, and promotion plays a more prominent strategic role in brand enhancement, brand consultants are in the ascendancy. In future, they will work with marketers to give vendor/agencies their marching orders.

MARC SMATHERS
SVP, GMR Marketing

Favorite launch: Kraft’s work with DiGiorno in the premium pizza category in 1994. “Kraft made sure that the quality of the product was recognized.” GMR came in with non-traditional sampling. “We went to fairs and festivals and found other ways to get it into peoples’ hands and prove it’s not delivery, it’s DiGiorno.”

STEVE WOODS
president Pierce Promotions & Events

Favorite recent campaign: Two years ago Gillette launched a new woman’s razor system called Venus. “By positioning it with the motto ‘every woman is a goddess,’ every woman we came in contact with during the mobile tour felt enfranchised, felt connected to that, and felt as though the brand was speaking to her.”