Talking Shop

On Sept. 8, PROMO Editor Kathleen M. Joyce sat down with executives of Arnold Worldwide, along with three of the agency’s key clients, to discuss how they develop campaigns that use a mix of disciplines for both branding and selling.

Arnold is unusual for the lack of “walls” among marketing functions it performs for clients. Around the table were: John Gasloli, brand marketing manager for Volkswagen North America; Kathleen Hall, executive VP, Fidelity Investments; Robert Corscadden, chief marketing officer, Tyson Foods; and, from Arnold, Beth Rice, senior VP/director, Pamela Hamlin, managing partner, and Jamie Tedford, senior VP-marketing and media innovation. PROMO Senior Editor Betsy Spethmann joined the conversation by phone.

The gathering’s timing was bittersweet for the agency: That morning, Fidelity launched its biggest single campaign in years, built around an Arnold-developed sponsorship of Paul McCartney, who reminded retirement-planners to “never stop doing what you love.”

It was also the day after VW had announcedit was ending its 10-year relationship with Arnold; by January 2006, all media, creative and promotion work will be moved to Crispin Bogusky & Porter. Gasloli and the Arnold execs were therefore nostalgic as they reflected on the work they had executed together.

SPETHMANN: We’ve been watching the growth of branding promotions and the closer integration of promotion with advertising and other marketing disciplines. Let’s start with the brand people here: Which are some of your best campaigns, and what makes them special?

RICE: Volkswagen’s “Drivers Wanted” campaign has steered the brand for 10 years. It’s translated into all manner of integrated programs: product launches, partnerships and nontraditional, almost guerrilla tactics.

GASLOLI: It’s a testament to really knowing what your brand stands for and who your brand zealots are. One of the keys to [our] drivers is an active lifestyle. Our earliest promotions were with Trek and K2, when snowboarding and cycling were just starting to hit. We [still] look for that first-to-market [edge], so we followed that up in the digital music arena.

Jamie [Tedford] and I worked very closely on our Apple iPod program two years ago. The Pods Unite program brought us back to sales levels [for the “new” Beetle] that we hadn’t seen for about 14 months.

Then, when we launched Phaeton, the nay-sayers were everywhere. We are an automotive company with a strong brand identity as “the People Car” entering an ultra-luxury segment. But we had the product to back it up. We knew that, in order to enter that world, test drives were key — once they sample the product, they’re five times more likely to buy the car.

With the help of the brand promotion team here, we put together the W Hotel program. Web, direct mail, event components — each offered test drives in several cities around the country. Our results completely surprised us. We saw 11% to 12% response rates to invitations.

Research said that 33% of the people in the luxury arena already had a Volkswagen in their garage as well. It could be a wife’s car, a city car. We took a leap of faith, and said the converse must be true: Phaeton drivers were in our Volkswagen database. That’s who we invited into the W Hotel program. We bested our test drive goals by about 40%.

RICE: The consumer insight led us directly to the promotional idea.

HALL: Integration doesn’t start at the end; it starts at the beginning. It starts right at the time of the consumer insight research. And then the ideas begin to grow from there.

TEDFORD: When we opened a dialogue with W Hotels, they said, “We were waiting for your call. This is the right match for us.” We heard the same thing from Apple with iPod. “This is the only partnership that makes sense.”

GASLOLI: When visiting the Apple campus over the course of the program we must have had a 30% to 40% market share in their parking lot.

JOYCE: You were counting cars!

GASLOLI: Yes! The Apple and Volkswagen mind-sets are just a natural fit. That’s why one of our ads for the program was, “Apple + Volkswagen = Duh.”

In June, we implemented the Passat Alpha Driver Program — be the first to know about it, drive it. It is a viral campaign via Arnold, VW and a company here in Boston called BzzAgents, for our most zealous Passat owners. We invite them to become word-of-mouth disciples for us.

TEDFORD: If we can get our product in the hands of fresh customers, new customers, then perhaps they will become evangelists.

GASLOLI: In addition to exclusive info, we provide [fans] with a kit of tools and information and things to share and things to pass along. The more they buzz, the more points that they get in a tiered reward structure.

SPETHMANN: What can people redeem their points for?

GASLOLI: Some iPod products in the top tier, rebate coupons for multiple retailers, restaurants, that kind of thing. Cash and gas cards.

SPETHMANN: How many members have you recruited so far?

GASLOLI: Over 5,200. Actually, within three days we had all we could handle. We had to stop sending anything else out. The passion is just humbling.

JOYCE: Speaking of spreading the gospel, John, is there a halo effect that has implications for some of the other brand lines that VW offers?

GASLOLI: These folks have been in the VW family for decades. It definitely has a spillover and halo effect. We’re examining the program for a lot of our future endeavors.

RICE: Every brand has these people out there, but finding them and turning them into marketers for you is a pretty cool idea.

SPETHMANN: I’d like Kathleen Hall to talk about [Fidelity’s] new work. I’m assuming this — the Paul McCartney work — is the biggest campaign that you’ve done recently.

HALL: Yeah. It’s huge. It’s sales promotion, it’s consumer promotion, it’s advertising. And it’s unusual for us. We’re inherently not cool — people get more excited talking about pantyhose than they do about investing.

Arnold helped facilitate a study with us on the buy-in process. We asked why people are not engaged? The primary reasons were confusion and feeling overwhelmed with choices. We always talked about 4,000 mutual funds and 85,000 choices — but people don’t want all that choice. Don’t even worry about selling Fidelity — we had to look at engaging people in financial services in general. And there was no emotional connection to any provider. We had to make sure people know what we stand for.

Internally, we saw ourselves as technology leaders, product innovators, champions of the consumers. Externally, consumers were saying, “Who the heck is Fidelity?”

We did a study in which people had to pick what Fidelity [and its competition] looked like as a person. Schwab was a guy in his shirtsleeves rolled up, young, engaged. Vanguard was this old guy. For Fidelity, they picked a big fat white guy in a boring suit. They said, “We like this guy, we trust him, but you just wouldn’t want to invite him to a party.” And our people were surprised.

We began rebuilding emotional engagement with a complete shift in tone of presentation. We used to have copy that would say, “For over 50 years Fidelity has…” — and you’d be asleep by the third sentence. We turned it to, “You need help? We can help you. Give us a call.”

We also began talking to people about their needs and the solutions we offer. Instead of saying, “Put Fidelity funds in your IRA,” we asked, “Why should you have an IRA? Because $3,000 today equals $300,000 30 years from now. That’s why.”

That’s where Paul comes in. We found that popular music makes an instant connection with people. And then, just over two years ago, Arnold presented the new “Smart Move” campaign with an execution that had McCartney. It said, “You could potentially use a celebrity, but in a very non-celebrity way.”

It sat on the back shelf as an idea that we really liked. McCartney’s people had been approaching us to help promote their tour, but it’s too obvious. We wanted a much deeper and broader relationship.

But Paul McCartney is never going to do a commercial endorsement. He doesn’t even like the word “endorsement.” But two things sold him: This isn’t just a selling issue — funding your retirement is a social cause in the U.S. — people don’t have enough to retire on! He totally bought into that whole social cause.

And when he saw the execution around him being a regular person, he loved it. [McCartney] liked the way we were celebrating his life and his reinvention. He loves the our line, “Never stop doing what you love,” because, if you think your retirement is going to be tough, this guy was a Beatle and went on from there!

But we needed much more than an ad to hook him. The keys were his music, and the continual reinvention of his music; charity; and the idea that the best is yet to come — elements that connected perfectly with promoting retirement and financial security. In 12 hours, we put together an idea for a promotion that would be suitable for us and natural for Paul.

We looked at current issues, and saw that music programs in the U.S. are being significantly cut. Of course, the football team is fine, but there’s no music in the schools. And yet studies show that kids who participate in music programs, particularly in grade school, are better students, less likely to do drugs, less likely to drop out of school. The data was just phenomenal. So we said, “This is it.” The idea of creating a legacy was perfect for both Fidelity and Paul.

Factor in that we are a heavily regulated industry. You can’t give people money, you can’t give them gifts over a certain amount. So this more indirect promotional route worked really well for us, using charity as the main channel for promotion with consumers and prospects.

We started the Music Lives Foundation, supported by Paul McCartney, dedicated to supporting music and the arts in schools. When people open a $10,000 account with Fidelity, we donate $40 on their behalf and they get a commemorative metal bracelet — it is really beautiful [passing it around]. Essentially the donation for the bracelet equates to an instrument in a kid’s hands.

CORSCADDEN: You’re never getting it back!

HALL: That’s the one that Paul touched, so it’s coming back!

A second promotion is more prospect-oriented. We were given rights to [McCartney’s] legacy catalog. Probably the most fun thing I will ever do in my job was creating a Paul McCartney compilation CD with him and his team. Customers get the CD if they update their plan.

[The campaign] has reinvigorated Fidelity’s entire organization. There isn’t anybody at Fidelity that hasn’t touched this.

RICE: Tell them about the employee voice mail.

HALL: Oh, yeah — we were kind of goofing around saying, “You know what’s cool is just talking to Paul, hearing the accent.” So he agreed to do an employee voice mail. As of this morning, a voice mail went out to all 42,000 Fidelity employees that said, “Good morning. This is Paul McCartney. I’m new around here,” just like he was talking to you. There were women, admins, crying, “But you can’t save it!” It was pretty cool.

Think about his concert tour and his fans. We will have a booth on site, an exhibit where you can come up, listening stations for [McCartney’s] new CD. You will be able to make your $40 donation right there at the concert venue, and receive the bracelet in exchange for that.

SPETHMANN: There are a lot of restrictions in the financial services category. Was it hard for [Arnold] to get to the promotional ideas, given those restrictions?

HALL: If I was doing ads here and everything else somewhere else, I would have to then go educate all of those other agencies on the restrictions in my category. So it makes it a lot easier [to work with Arnold].

TEDFORD: To Fidelity’s credit, they never said, “This must equal X number of new accounts.” While there are business objectives underlying this sponsorship, a much more complex set of metrics will measured its impact on the brand.

HALL: Even though we’ve doubled our new households in the last year, we’ve halved our cost of acquisition.

When I first came to Fidelity, “brand” was a bad word. It’s not anymore. And that’s a major coup for a company that essentially is a direct response company from its roots.

One of the nicest e-mails that I got was from our corporate CFO, which is rare. I think she wants tickets….

RICE: Tyson has had a similar shift. I would love Bob to talk a little bit about the repositioning of that brand.

CORSCADDEN: We were the largest chicken company in the world in 2001, when we bought the largest red-meat company in the world. We went from about $7 billion to $21.5 billion literally in one day.

HALL: I can’t even tell Paul McCartney I was in the same room with you!

CORSCADDEN: I don’t think he would be a good spokesman for us.

We brought together two large companies that had been, quite frankly, competitors from the beginning of time. So we had two challenges: how to market our chicken, beef and pork products under one umbrella; and how to unite our companies.

Working with Faith Popcorn’s brain reserve out in New York, we came up with a very simple statement: “Tyson = protein = power.” That statement took us back to the benefit of the product that we sell. We’re providing protein, which you need to repair muscles and have a good quality of life. Rather than competing on what we’d traditionally been — the chicken guys against the beef or pork guys — we addressed what nobody else was talking about: protein.

So how to tie this together, to make internal and external sense? That’s when we hired Arnold.

We’d had an ad agency, and a promotion agency and a PR agency. The coordination problems are just ungodly. We went into the relationship with Arnold with the idea that we wanted an integrated agency.

They came up with a strategy based on the “strength provider,” which is our target. And that took us to our tag line. “Powered by Tyson.”

We have fun advertising that talks about protein, about the products that we sell. And then it goes one step further, to our internal audience. We’ve got 114,000 team members. We bring all these folks together by talking about protein. Tyson means “chicken” to 95% of consumers. We’re transferring that equity to our beef and pork products. It’s a unified — and unifying — message that lets us talk as a company, not as separate entities.

The partnerships that we developed on the promotional side really are an outgrowth of the strategy. We needed a promotion with NASCAR. But “been there, done that,” everybody’s got a logo on a NASCAR vehicle. How could we come up with something different that was unique?

Arnold suggested powering the people that power NASCAR, and got us involved with the guys that fix the cars and power them to victory. We had an incredible promotion this summer with the Crew Chiefs Club. We did a championship down in North Carolina, covered on the Speed Channel on XM radio, plus a huge Web presence with promotions. We brought our customers and our team members in via tickets giveaways.

On another front, the agency brought us to U.S. Gymnastics. Carly Patterson was at the height of her popularity. We signed her and the tour of champions to target one of our major audiences, moms with kids. That did a tremendous amount for us in terms of goodwill.

Everything is built on powering people, including our charity work. We partner with Share Our Strength, an anti-hunger organization out of D.C. Powering people through donations in local markets with a gymnastics tour and integrating these two things into one kind of promotional event was extremely successful. Carly was a great spokesperson for us on local TV and radio, talking about Tyson and Share Our Strength.

Finally, some of our competitors have these huge buses, semis that go to a town and set up for a day. So they don’t get very good coverage. Instead, we send out three step vans that go all over the country. Because they’re smaller, we can set up anywhere. Our brand shows up in unexpected places: ball games, children’s hospitals.

HALL: In the Astrodome….

CORSCADDEN: We’ve already got a bunch of people down there, delivering our brand promise of “Tyson, Proudly Powering the World.”

RICE: It’s a moving kitchen to activate what we do as a brand. We give people a sample. We engage them in an activity. It builds awareness, and it drives sales.

CORSCADDEN: If we can get plugged in at that level — here is Tyson in my home town, supporting my kids — that has humongous benefits for us.

RICE: So much of the best work that we’ve done, and I think we have spoken to it all around the table, is that emotional connection, that relevance to daily life. The best stuff we do with Tyson is taking Carly Patterson to a local grocery store and doing an autograph signing. It’s little. We might see 300 people. But it’s right, though, and it’s authentic.

JOYCE: And yet these all seem to be big-idea campaigns that can have tremendous longevity. Where do you get these big ideas that can have legs that you can perhaps extend to some of the other components that are in your stable or that allow you to deal with both chicken and red meat products or allow you to sell a whole portfolio of investment opportunities?

The big idea that has personal roots is the theme. People feel so disconnected now, that you’ve got to bring it right down to, “Did you hit me emotionally?”

JOYCE: Right. And knowing and speaking to that target.

HAMLIN: Every idea comes right from the soul of what the brand stands for. Think about all the ideas that we’re discussing: McCartney and Tyson never would work. Gymnastics and VW, that’s not a fit. Great marketing emanates from what the brand is about and how to make that connection with your very best customer.

SPETHMANN: But it’s not only understanding the brand essence but it’s understanding the consumers too.Clearly, you put a lot of work into consumer insight.

HAMLIN: Absolutely.

RICE: We’ve learned as an agency that the same insightful, thoughtful, careful process that leads to great advertising creative leads to other integrated ideas as well.

HAMLIN: It starts with a core idea. Where a lot of agencies go wrong is starting with an ad, and then trying to extend the ad. If an idea doesn’t have that ability to extend, it’s not an idea; it’s an execution.

TEDFORD: We weigh an idea through all these channels: How does this play to the employee? How does this play to our trade — an element that you talked about, Bob — how does it play to the consumer? If it doesn’t pass any one of those tests, it doesn’t become an ad.

CORSCADDEN: We’re finding that our strategy can’t just work for the general market. We have an African-American agency, we have a Hispanic agency, we’ve got a food service agency. So the concept had to work across all these other segments that we market to.

The agency of today, the agency of record, the general market agency that’s really leading these kinds of things has to be able to work with all these other groups to make sure that idea fits everybody.

JOYCE: How do you sell the big idea and also the investment in the big idea at the corporate level? How you get the CFOs to buy in?

HALL: The hardest part of the job!

CORSCADDEN: We were at a crossroads. We had brought these two companies together. We knew we were probably spending enough on chicken, but now we have all these other new products to talk about. And it really wasn’t as difficult for me as you might believe, because —

HALL: There was a vacuum.

CORSCADDEN: — there was a vacuum.

HALL: God, I wish I had that.

CORSCADDEN: And our senior management team realized, if we don’t do something now, we’re in deep trouble.

I was fortunate, I got to do a presentation on Wall Street to the analysts. Afterward, I heard “This is how we expect a leader to act, coming up with something big like this, putting your money where your mouth is, really bringing these things together.” So we were fulfilling an expectation.

HALL: We had a lot of skepticism, and the truth test with employees was part of it. We’d had five tag lines and six campaigns in four years. There was a lot of skepticism.

But we rooted everything in research. We’re an analytical company — we’re the analysts that you were presenting to [to Corscadden].

We turned our science on ourselves, because when we evaluate companies from an investment standpoint, we look at their brand value.

Lastly, we parceled it out. We couldn’t have done Paul McCartney year one. But we had a lot of little wins. Now, anybody complaining gets squashed by the internal advocates. The naysayers gradually begin to fall off, because this train is moving.

GASLOLI: The same for the Volkswagen brand. In the early to mid 90s, some of the owners in Germany were ready to fold our tent, and not sell Volkswagen on U.S. soil any more. Thankfully there was a visionary in Germany who said, “Hold on, too much invested here.”

Arnold came on board. “Drivers Wanted” was born. You build success one piece at a time, so that when you come forward with the next, it’s easier, and you’ve got a proven record. You’ve got success and you’ve got metrics in place to get you to build that case with management.

HAMLIN: Kathleen said it nicely earlier: “Integration doesn’t start at the end.” It starts at the beginning with the power of the idea and then being able to test how to express that idea across all those channels.

SPETHMANN: How do you make sure that it’s all consistent to the brand?

RICE: We made a decision about nine years ago, when we got into the promotions business, to never build a separate creative department that would be “the promotions creative.” There was one creative group at Arnold, and they were going to be in charge of every piece that got done for any client, every communication. The sign at a gymnastics event in Indianapolis is just as important and should look just as Tyson-like as a television execution.

CORSCADDEN: I’ve been with other agencies before that say they have all these [integrated] capabilities. And you get into it, and the ones I’ve worked with, some of the agents I’ve worked with in the past, they don’t really have the depth to be able to do the level of brand promotions that you all do here. For the advertising part, you know, it’s like, Okay, we’re this big ad agency and yeah, yeah, yeah. They talk about integration, but I don’t think it’s as deep and —

HALL: And actual.

GASLOLI: We’re a little bit different than Kathleen and Bob, since we have multiple models — they’re all Volkswagen, but it’s not a strict design. Stuff on Passat is going to need to look different than Beetle. It all has that Volkswagen feel to it. When you know that target and what they’re looking for, it still feels like Volkswagen, because we’ve stayed true to knowing our driver, being honest and friendly and approachable.

SPETHMANN: Are your staffs and your budgets structured in a way to either facilitate or become a hurdle to more integrated marketing? Do your marketing staffs work in silos? Do they work together? Do you have separate budgets for the different disciplines?

JOYCE: Have they changed as compared to 10 or five years ago?

HALL: Well, from our perspective, ours hasn’t changed, but the agency world has changed positively.

We’re objective focused. It’s not about what happens to make that objective happen, and all those separate disciplines. That’s the way it should be.

The first brand team approach was just getting the disciplines of account service, media, creative and production together. And now it’s way beyond that, with p.r., promotion, brand, everything together in one place. The agency world continues to evolve and adapt to what the client needs are.

JOYCE: Within your overall group at Fidelity, Kathleen, do you have separate P&Ls for the various marketing disciplines?

HALL: I have a promotion P&L distinct from a p.r. P&L, but I manage those budgets against the goal of mutual funds or brokerage or brand. That’s how we’re structured.

CORSCADDEN: We do the same thing. We have one “corporate marketing budget.” Each of the disciplines gets a budget at the beginning; but then as we move through the planning process, stuff moves into promotion, moves into advertising, moves into interactive, moves into event. It’s all a fluid thing until the end.

GASLOLI: It’s more about priorities than track the pricing, who doesn’t get what. It’s what needs to get done.

HALL: It used to be, show me the network television and —

RICE: And whatever is left, we’ll do some of that stuff.

CORSCADDEN: If you have all the budgets in one place, I don’t care where it’s going to come from.

HALL: Remember when it used to be a big deal if you shifted budget from network to spot? The network people would be mad at the spot people. Look at how far we’ve come!

JOYCE: Beth, are these three clients unusual in that regard, or do you find that there are more brands out there that are willing to think and budget that way?

RICE: Many get close. But there are all kinds of reasons why it doesn’t happen particularly easily or quickly. But I do think this is where marketing is going. It is just vital that we shed our traditional roles and figure out what the answer is or the client.

My colleagues who work mainly on advertising in a couple of cases have been as big a proponent of that, saying, “You know, advertising isn’t the answer.” The first day that happened here for me at Arnold, I could hardly stay in my seat. I thought, my God, this is what it needs to be. I was in a presentation with a creative director who was saying, “Advertising isn’t right here. This is what we need to do.” And that creative director was just as passionate as I was about selling that idea, and I think the clients benefit from it.

CORSCADDEN: One of the things that we’re pushing is that this is one piece of our jobs; I can’t manage all the different disciplines by myself with my team and manage all the other things that we’re supposed be responsible for. We went to this agency on purpose for the things that they have, because I just don’t have time to handle all this stuff.

JOYCE: Thanks all, for sharing your stories today.