2010 Promo 100 Agency of the Year; Alcone Marketing Group

Matt Alcone caught the promotional marketing bug in high school, helping a sporting goods company run promotions to teach kids how to ski on artificial snow. It wasn’t long before big brands like Rossignol, K2 and Salomon took notice and asked if the promotions could be coordinated nationwide.

The young entrepreneur started his official marketing business in college, with a P.O. box on Balboa Island, CA. He didn’t have access to backend services offered by established agencies in Chicago or New York — like data processing and supplying promotional merchandise — so he learned to do those things himself, inhouse.

Apparently, he learned well, because the agency — now called Alcone Marketing Group — was purchased by Omnicom Group 19 years ago.

“When you’re young and naïve, you don’t know what you’re up against,” Alcone says.

That pioneering inhouse model remains at the core of Alcone’s success. Over the last five years or so, those services have been re-engineered and made current based on emerging technologies and new media. They include warehouse distribution and fulfillment, retail promotion, promotional marketing, branded merchandise, and premiums and incentives.

As an example, having access to a warehouse that houses P-O-S materials, marketing materials, sell-in brochures, fixed displays, premiums and merchandise and sales incentive prizes offers the ability to reverse engineer what’s working at retail.

“We have a unique perspective as to what is going on at retail based on what we see exiting our warehouse and where those materials are going from a class of trade or channel,” says Bill Hahn, Alcone CEO and president.

New offerings have been folded into the mix, including digital and shopper marketing, which has become an important component of the consumer communication mix.

“Our perspective is that consumers have many [different] mindsets over the course of their day,” Hahn says. “It’s as important to reach the consumer at the shelf or walking the aisle as it is when they are making decisions at home or talking to friends. The decision-making process goes way beyond the shopping experience in store.”

Alcone has shown respectable growth over the last three years during challenging times that pushed many agencies’ revenues down — in some cases dramatically. Alcone had an estimated net revenue of $62.4 million in 2009, $57.8 million in 2008 and $56.1 million in 2007.

So how does an agency grow in difficult times?

“When the economy began to go soft, we realized that our No.1 mission was to make sure we were making huge contributions to existing clients,” Hahn says. “Over the course of troubled times, you need to be labeled a trusted adviser — and that is achieved by doing what’s right for the client and their business and may not be the ideal thing for the agency.”

One of those clients is Mike’s Hard Lemonade. Alcone won the business in the fall of 2008 after Mike’s used a search group and advisers and fielded, “a ton” of agencies in below-the-line business. Mike’s was looking for a one-stop shop and selected Alcone.

“What was different was how quickly they developed a great understanding of Mike’s and what Mike’s is all about and what our consumer is all about,” says Philip O’Neil, president of Mike’s Hard Lemonade. “To show how well they prepared, the one idea they pitched us ultimately became the 10th anniversary promotion. That’s fairly rare in my experience. Everything has to tie to retail, and I think Alcone really gets that. They really hit it out of the park in the pitch process.”

The 10th anniversary promo resulted in the best year for the company, O’Neil says.

In fact, Mike’s, a $225 billion company, has seen its two best years of growth since working with Alcone. During fiscal year April 1, 2009, through March 31, 2010, case volume grew from 11.5 million to 13.5 million cases, an 18.3% growth, O’Neil says.

He added that the personal attention extended from the agency “is the best.” “It’s been a great ride for us,” he says.

For Alcone, the mantra is that slow and steady wins the race

“I would rather make a little bit of money a lot of times and know that the phone is going to ring with current clients, than make a lot of money once and hope it rings,” Hahn says.

Alcone headed into 2010 with every client it had in 2009, including Sun Products, whose brands they have worked with for more than 10 years.

“That’s a tribute to their consistency and integrity,” says Michael Murphy, vice president of marketing services at Sun Products.“They work for us. They don’t work on our business for them, they work on our business for us. There’s a very big distinction there.”

Last year, the agency also added new clients to its roster: Visa, Intuit, UPS and Zatarains. And this year it has won work from two Unilever brands, Ragu and Vaseline, as well as Norelco at North American Phillips, Dentyne at Cadbury, and Nerf and My Little Pony at Hasbro.

Alcone’s work has also been validated by its peers through Promo Pro Awards, Promo Interactive Marketing Awards and the Promotion Marketing Association’s Reggie Awards.

Most recently, the agency won First-Place in the Internet-based Loyalty Marketing category of the 2010 Promo Interactive Marketing Awards for its promotion “California Lottery Replay,” created for its client the California Lottery.

Alcone developed an online program, called “The Lottery Replay: Every 2nd Counts.” The program rewards loyal players with more ways to play and win additional cash prizes and other unexpected perks and prizes. The odds of winning increase the more they played.

Back when Matt Alcone was getting the business started, he tried to appease his mom by going to law school, but while stepping out of class to field a call for his growing promotion business it struck him that he had reached a fork in the road. He threw his books in the trashcan and never looked back.

“This was just too much fun,” he says.