PROMO looks at the people who helped drive the promotion industry into the 21st century.
“The relationship is now interactive, with the consumer more in charge.”
That’s what Miller Brewing Co. ceo John Bowlin told the Association of National Advertisers at its annual conference in October. Bowlin’s comment echoes thoughts expressed by many of the conference’s other distinguished speakers, and reflects an idea that is shaping not only promotion, but the marketing industry as a whole.
Those words can also serve as a template for explaining PROMO’s reasons for identifying the people profiled here as “20 Who Made a Difference” in the year 2000.
The consumer is more in charge: Technology that puts the world at everyone’s fingertips and any product or service – or promotional offer – within reach of the masses has pushed consumers to new levels of empowerment. Not that they hadn’t already been heading there, thanks to the endlessly growing supply of media options that seems destined to turn every experience into an audience of one. But they’re there now, and you can mostly thank the Internet for it.
“The consumer is boss,” said new Procter & Gamble ceo A.G. Lafley (who’s on our list) at the ANA conference, as he outlined a marketing future in which “product benefits become solutions … shopping and usage becomes experience … transactions become relationships,” and each customer receives personal, customized attention.
CLUETRAIN CONDUCTORS The Names: Rick Levine, Christopher Locke, Doc Searls, David Weinberger
The Difference: In 2000, it wasn’t a real promotion party until someone asked, “Have you read Cluetrain?” Shortly after it was published in February, the book became required reading among the marketing cognoscenti – literally, in some cases, as corporations handed it out at department meetings and dropped it into new-hire information packets.
Developed from an online posting of “95 Theses” intended to snap corporate marketers out of their customers-are-lemmings doldrums, Cluetrain warned corporations to come down from the penthouse boardroom and view the new networked marketplace as a way to establish open and honest “conversations” with customers and employees. Otherwise, those customers and employees will do it for themselves.
“Marketing had become a bazooka aimed at a target instead of a handshake – which is what it originally was,” says Searls, who in a past life was part of high-tech marketing shop Hodskins Simone & Searls. “Our goal was to get the dot-com world to accept it. But it’s been the traditional companies that have really taken to it. The first one we heard from was Procter & Gamble.”
The Last Word: Will marketers join the Cluetrain, or simply find ways to make the same-old strategies seem more open and honest? “A lot of these traditional companies seem serious about changing, and [the book] seems to give them some permission to do that,” says Searls. “I’ll take their word for it.”
RICHARD GERSTEIN Title: VP-Marketing Company: Reflect.com
The Difference: Procter & Gamble’s online cosmetics shop is setting the standard for customer relationship management.
Year-old Reflect.com has created 700,000 customized products one woman at a time. Shoppers create a personal profile, then design their own products based on prompts. Shipping is free, information is confidential, and products are upscale. Three days after their order is shipped, first-time buyers get a live orchid as a thank you. Browsers who register and create a product they don’t buy get a surprise “delight sample” with their name on the bottle.
“One of our biggest goals this year was to build a relationship with women,” says Gerstein. Return visits are higher than the year-old site expected, and shoppers rate it on par with Amazon.com for service. Reflect.com added fragrances in September, partly because women asked for them. A November upgrade made the site easier to navigate and streamlined the customization process.
A 13-year P&G veteran who quit the big company to join Reflect.com, Gerstein knows the value of sampling: “If we can convince a woman with one product that customization works, she’ll try it with other products, too.”
The Last Word: “Every day I read women’s letters about how great they feel and how we help. That sounds trite, but it’s a good feeling to know we’re making a difference.”
DICK HINSON Title: VP-Marketing Company: Roche
The Difference: He’s been audacious enough to call for a few curveballs in an industry where traditional marketing efforts have been, well, painfully traditional. Roche hasn’t just entered direct-to-consumer marketing; it has re-defined it for the entire pharmaceutical category, and made the entire promotion industry take notice in the process.
The two curves reached home plate in January, when the company began testing a mall tour for weight-loss drug Xenical (with the help of DVC ActiveCare) and launched flu remedy Tamiflu with a team of eight mobile units (with the help of Momentum).
Both campaigns pushed the prescription envelope but kept the FDA comfortable. Tamiflu won marketing awards both in the U.S. and internationally (November PROMO). “Anyone is a potential patient,” says Hinson. “The idea of the tour was to express that the only way you could avoid being a patient is if you were hermetically sealed in a box.”
The Last Word: “This was an unusual promo for the pharmaceutical industry,” Hinson says of the Tamiflu campaign. “In my experience, most people would have written this off by saying, `This isn’t how we do things.’ But our team took a daunting task and remained undaunted.”
BETSY HOLDEN Title: President Company: Kraft Foods
The Difference: The gender. As Kraft’s first female president, Holden is the key consumer in the corner office. Staffers gave her a standing ovation her first week. Since her May appointment, she’s begun a management reorganization to simplify decision-making, and will oversee the merger of Nabisco brands into the Kraft business.
A long-time member of Kraft’s Growth Task Force, Holden cites three strategies: “Transforming our portfolio via marketing innovation, new products, and acquisitions/licensing, with emphasis on convenience; capturing our fair share of growing channels; and growing underdeveloped consumer segments like the Hispanic market.”
One top marketing goal: Increase the impact with innovative ideas integrated through all elements of the marketing mix.
The Last Word: “Someday, our society will be at a point where the ceo’s gender or ethnicity isn’t considered news. We’re not there now and the fact is, it is somewhat unique to have a woman running a business the size of Kraft,” she says. “Diversity at Kraft … is about recognizing the power of differences as a source of competitive advantage. In fact, diversity is a fundamental reason why we’ve been so successful. We bring that to our relationships with consumers, retailers, and other key audiences. But … what matters most are not demographic characteristics – it’s character, actions, and results.”
AL KAHN Title: Chief Executive Officer Company: Leisure Concepts
The Difference: Kahn had the vision in 1995 to spot a hot property and the acumen in 2000 to steer the biggest marketing franchise of the year.
Kahn first discovered “pocket monsters” during a fateful trip to Japan, and immediately figured the property could do well in the states. But even he never imagined that it would become the most licensed property in U.S. history.
After acquiring licensing rights from creator Nintendo, Kahn’s New York City-based Leisure Concepts shortened the name to the catchier “Pokemon” and conceived a “Gotta Catch `em All” tagline that would become gospel to millions of pre-teens. Pokemon is now an almost $6 billion-a-year franchise that has been licensed to some 1,500 companies. “You never know going in,” Kahn says. “If you try to plan on something getting this big, it won’t happen.”
Kahn started at Leisure Concepts in 1986 after heading up marketing and product development at toy maker Coleco, where he was responsible for the launch of another monstrous fad, Cabbage Patch Kids.
The Last Word: “The whole world is represented in the toy department – refrigerators, cars, clothes, they’re all there,” he says.
DURK JAGER/A.G. LAFLEY Titles: President,Chief Executive Officer Company: Procter & Gamble
The Difference: The answer to the musical question bandied about in the media recently is, “Yes. P&G still matters,” even during a transitional year at the top.
Jager’s brief 18-month reign ended in June, but not before P&G shook up the advertising industry by unveiling a plan to compensate agencies based on brand sales performance. (The policy began July 1.) It also set into motion a massive restructuring that included market development organizations to advise brand teams on local consumer and retailer issues.
Lafley (pictured) took over mid-way through the year after heading up P&G North America and Global Beauty Care during Jager’s tenure. He’s looking for a leaner, meaner P&G that will focus on brands with global leadership potential and will use a heavy dose of Internet to do it. The example he uses is the launch of Physique hair care products with a trial-inducing Web site that has already delivered one million samples.
The Last Word: “The industry is moving away from advertiser push to consumer pull. Marketing has been about transactions, but now it’s about personal relationships,” said Lafley, while telling attendees of the ANA conference that P&G will look for “more alternatives to TV.”
WARREN KORNBLUM Title: Executive VP-Worldwide Marketing and Brand Development Company: Toys “R” Us
The Difference: Retail is king in this industry, and Kornblum has been holding court this year as keynote speaker at two major conferences and architect of a massive restructuring of Toys “R” Us’s marketing strategy that could ultimately serve as a blueprint for others.
Hired in 1999 to reverse a 10-year decline, the former Bozell Worldwide managing partner overhauled the marketing department, put the $70 million ad account in review, and embarked on the chain’s first serious drive into promotion. A new Toys “R” Us began to emerge. Tie-ins with sports, QSRs, and Hollywood are just the outer trappings of a philosophical overhaul that will impact the entire company, not just marketing.
The final goal is to re-endear the chain to families – and take the world back from discount stores – with better customer service, exclusive merchandise, and a new store prototype (a massive flagship opens in Times Square next year) that may redefine “in-store marketing.” (Rumor has it Wal-Mart and Target are keeping close tabs on Team Kornblum.)
The Last Word: “We have 45,000-square-foot toy stores around the world while most competitors have toy departments,” he says. “We’re bringing the fun back to our brand. If we can’t do a wonderful job – then shame on us.”
STEVEN KREIN Title: Chief Executive Officer Company: Promotions.com
The Difference: The poster child for Internet marketing was evangelizing about the effectiveness of Web-based promotions before many brands had home pages. And although New York City-based Promotions.com has hit some business snags recently (learning that Wall Street is a harsh taskmaster), Krein sallies forth preaching his simple mantra to potential brand and agency clients: Hail to the Net.
On a quest to unite the click world with the brick world, Krein and fellow co-founder Dan Feldman borrowed $30,000 to open their office in 1996. Since then, the company has grown exponentially. It burst onto the industry scene in 2000, becoming the first pure-play Internet company to join the ranks of the Association of Promotion Marketing Agencies Worldwide and the PROMO 100.
Part of the reason Promotions.com resonated more clearly this year was a concerted push to become more a behind-the-scenes marketing partner and less the operator of Webstakes.com, a consumer destination site that was the company’s original focus. That client-based practice now spins creative campaigns for such traditional heavyweights as General Mills, Sam Goody, Kraft, and Dunkin’ Donuts.
The Last Word: “CPGs are starting to get it,” he says. “And when they truly understand [Web marketing], you won’t see the Internet component as a feature of a promotion. It will be the feature.”
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