THE ZIP CODE: Whew.
The Zipatoni Company proved its mettle in 1999 after a single win from Miller Brewing Co. tripled billings at the little St. Louis shop in 1998. Zip digested that sudden growth, performed steadily through a marketing tempest at Miller, and added work from both new and existing clients.
What had been a $9 million shop ballooned to $24 million in billings when Miller consolidated its estimated $25 million-plus account at Zipatoni and event agency GMR Marketing, New Berlin, WI. Managed growth brought Zip’s billings to $27.7 million and net revenues to $21.5 million in `99.
The agency added 44 staffers last year, moved to new quarters in St. Louis, opened a Chicago office, and is eyeing New York City. Long-time clients Bacardi and Energizer increased assignments (including the launch of E2, Energizer’s super-premium brand), as did newer client Coca-Cola. New wins came from Campbell Soup Co.’s Pace brand, Timex, Alltel, Sportshuddle.com, and, this spring, Michelin.
Miller still casts a long shadow at Zip – the client accounts for 30 percent to 40 percent of Zip’s billings, a bigger chunk than most agencies find comfortable.
“If we can grow by $3 million to $5 million a year with the right clients, we’re doing fine,” says president Jim Holbrook. “It’s better to pick up two nice-sized, long-term clients than ten $200,000 clients or one mammoth one.”
The agency seemed vulnerable when Miller president Jack McDonough and marketing chief Jack Rooney abruptly resigned last summer. In August, the beer maker fired ad agencies Fallon McElligott, Minneapolis, and Wieden & Kennedy, Seattle. Outsiders wondered if Zip would get swept out in the housecleaning that brought in Kraft Foods and Miller veteran John Bowlin as president, and charged Philip Morris’s very successful marketing/sales tag team of Bob Mikulay and Jim Mortenson with fixing creative direction and distributor relations once and for all.
Miller shifted its $95 million Miller Lite account to Ogilvy & Mather and its $60 million Miller Genuine Draft business to J. Walter Thompson, both New York City. It scrapped Fallon’s “Miller Time” and “Dick” ads and set about patching things up with disgruntled distributors. Through it all, Zip stayed put. “There was never a time we felt like [Miller] looked at us with a jaundiced eye,” says Holbrook.
“They’re the brand promotions department,” says Miller director of promotion Joe Jones. “When ad agencies come in to pitch ideas, we want them to already have talked to Zipatoni.”
Latest beer work is Get the Goods, Miller’s sophisticated offline and online continuity program with a charity twist. Drinkers collect “Miller Beer Bucks” on cans and bottle caps to spend at an online auction-cum-fantasy camp. Consumers bid (with Bucks or real cash) on 1,000-plus goodies, including one-of-a-kind items such as an autographed hood from Rusty Wallace’s No. 2 Miller Lite race car or a replica of the swimsuit featured on the cover of the 2000 Sports Illustrated swimsuit issue, signed by Rebecca Romijn Stamos. Bidders register at MillerGetTheGoods.com (hello, database) and choose a charity from Miller’s list, which includes United Cerebral Palsy, America’s Second Harvest, AIDS Action Foundation, and Easter Seals. All cash proceeds go to winning bidders’ charities of choice. The campaign runs through Aug. 15.
HIGH SPIRITS
Zipatoni principals are judicious about growth. They turn down 10 to 15 inquiries for every piece of business they win, preferring “clients that hire us to be marketing partners with them,” says chief operating officer Mitch Meyers. “It’s more of a consultative role and requires smarter-than-average agency personnel. This is tough to find. But when we do, we really differentiate our services from [agencies] that take the orders and offer only `fries’ with it.”
A huge win could also distract staffers from smaller accounts, but the Big Blip That Was Miller didn’t phase other clients. “It was good that [Zipatoni] geared up [to handle Miller],” says John Gomez, group marketing manager for Bacardi. “That gave them the infrastructure and a bigger mindset, so that when we were ready to grow, they were ready for us.”
Zip created an on-premise program for Bacardi’s Bombay Sapphire Gin, an upscale brand losing martini drinkers to vodka. A bar-ware collection created by designer Peter Hewitt was presented to the top three percent of Bombay’s trade customers. That rewards bar owners while positioning Bombay Sapphire as the ultimate martini gin, to encourage trial. Bacardi reviews accounts every six months to target top-performing bars with other designer items that serve as P-O-P. Bombay Sapphire sales rose 36 percent in 1999. A second bar-ware set – by Taiwanese designer Shao-Pin Chu – shipped in April.
When Bacardi bought Dewar’s in 1998, it was the No. 1 Scotch brand, but was suffering from an overall decline in brown goods sales. A first-quarter `99 campaign (after the brisk holiday season) tapped consumer interest in the stock market. Off-premise displays in 5,000-plus stores introduced the tagline, “Take Stock in a Real Drink,” and offered a booklet of tips from Money magazine written with a Zip twist. Sample copy: “Why mutual funds are better than sex,” and “Relax, last year a monkey out-picked top money managers.” It made the brand (never mind the stock market) more approachable. Dewar’s carried 50 percent of category volume during the promo.
Clients like Zip’s strategic thinking and the quirky creative that built the shop’s reputation as a boutique. They also like the way the agency listens and asks questions.
“Many agencies are very tactical, but Zipatoni understands brand strategy and extends it promotionally,” says Gomez.
“They grasp my strategy and translate it well,” says a client who asked not to be named. “We don’t go through 15 rounds of storyboards. And they’re very good about asking how far they can take an idea.”
Miller’s Jones says, “They have their intellectual horsepower focused on our business. The work gets better and better, because they keep getting smarter about our business.”
Zipatoni helped stodgy Campbell’s go beyond its basic FSIs. A December-January Championship Series effort put sports symbols on a scratch-and-win FSI. Consumers scratched off symbols, then matched the FSI with in-store displays to find winners. “It was more exciting for consumers than a regular FSI,” says senior marketing manager Aine Scallon.
Campbell didn’t get enough displays up, so the promo didn’t rev like it should have. “They had higher expectations of how we could execute,” Scallon says. “They know now to develop promotions that are turn-key and don’t require so much from our salespeople, whose hands are full.”
P-O-P and design are among Zipatoni’s strengths. The shop won Promotion from Point-of-Purchase Advertising International’s Display of the Year Award for Best Sales for Miller Lite Football displays. Jones praises Zip’s regional work – such as the Miller Lite Cantina in Texas and on-premise promos in San Diego’s Gaslamp District – and credits the shop with helping improve distributor relations. The agency helps lead Miller’s quarterly distributor meetings for “an exhaustive review of programs,” Jones says. “That has helped distributors understand what it takes to get promotions out the door.”
COMING FULL-CIRCLE
Miller’s shift to fewer, bigger promos makes “better use of their creative energy,” Jones says. “It gives them more freedom to examine the possibilities, because we want to extend to many media.”
Multi-media, especially the Internet, has transformed the promotions business, says Meyers. “We can use the Internet to surround our consumers 360 degrees. It’s a promotion marketers’ dream,” she says. “We can have a much better interaction with consumers interested enough to interact online.”
Interactive games let marketers change consumers’ perceptions of a product. “You can bet that we will continue to hang on to these consumers and give them a better brand experience than they can get through a `push’ medium like TV,” says Meyers.
Zipatoni has handled online promos for Edy’s/Dreyer’s and Chicken of the Sea, and has also collaborated on work for Miller, Campbell’s, Energizer, and Bacardi. But the shop is “suspicious” of potential dot-com clients with little promise of longevity, Holbrook says, and has turned down assignments that would have been paid with stock.
It reshuffled ZED, the stand-alone Zipatoni Electronic Design group, putting creative staffers on account-service teams and assigning tech staffers to production. The agency spent $1.5 million upgrading information technology in ’99, and now does its own pre-press and retouching work – bettering quality, lowering cost.
Clients also praise Zip’s whole-hearted approach. “They go to the wall for you,” Bacardi’s Gomez says. “They have this incredible can-do attitude. They always find a way of making it work.”
That anonymous client concurs: “When I give them something, I have so much confidence that it will be looked at from 360 degrees, creatively and ethically. I’ve worked with other agencies that inflate their charges. Zip is not just looking at its own business – it’s looking at my business, and how we can grow it together.”
Sometimes the creative force gets a little breathless, and clients hesitate.
“I still want to see more quantitative analysis to back up their ideas,” says Jeff Ziminski, vp-marketing at Energizer. “I want to see how the big idea will pay off from a numbers perspective.”
Client loyalties run deep. If blood is thicker than water, then beer is thicker than blood. When Rams fans flooded downtown St. Louis to celebrate their team’s Super Bowl victory, a few Zip staffers slipped into the office to use the bathroom. Fellow revelers had to go, too, and the Zippers were happy to oblige – only if Bud-drinking fans dumped out their beer first.
“They’re a pretty feisty group,” Jones says. “They cheer for the underdogs because they’re a St. Louis agency working for the other guys.”
It’s good to have friends like that, no matter where they are.
