"Building a brand is about a thousand little new touches," according to Eric Ryan, co-founder/chief brand architect, Method Products, Inc.  "Consistency is only for liars."

San Francisco-based Method is a household-cleaning products company founded by an agency account planner (Ryan) and a chemical engineer (Adam Lowry) in 2001. Their brand's marketplace point of difference was empowered by the diversity of their backgrounds.  "We very much think of ourselves as a 'challenger' brand," said Ryan. "Most entrepreneurs are foolish enough to go up against one Goliath. We were foolish enough to go against seven Goliaths."

"So we are forced to think differently about everything we do," Ryan told the 2009 Masters of Marketing annual conference of the Association of National Advertisers (ANA).

Method has to be different, if for no other reason than financial considerations. Its competitive set in the household-product categories includes Church & Dwight, Clorox Co., Colgate-Palmolive Co., Procter & Gamble, Reckitt Benckiser, SC Johnson, and Unilever. Their "collective war chest for marketing," said Ryan is some $2.7 billion, compared to Method's $5.1 million.

The Method difference is grounded in "our organizational structures and even the way we present our brands," the co-founder continued, as he articulated the three points of 'The Method' Method.

"One, we started the brand from a belief. Two, we branded ourselves from the inside out. And three, the entire way we think about marketing is that it's nothing more than a conversation."

Because "effective marketing means participation," Ryan continued, Method is about to give its brand loyalists a new viral rallying point for its on-going conversations. And that conversation is about to go viral.

The Method community is organized around the idea of "People Against Dirty."

"As human beings, we have this need to feel important," Ryan explained. And one way to satisfy that need, he continued, "is to belong to things bigger than ourselves. So, when a brand can put something out there that's bigger than yourself, it's motivating…. To go to work and make soap is not that motivating. To go to work and make the world a cleaner place, that's damn motivating."

Method has identified a pending piece of legislation - the Household Product Labeling Act of 2009, sponsored by Sen. Al Franken (D-MN) - that would require household cleaners to disclose their ingredients, a piece of information not currently mandated that would differentiate the all-natural-ingredients point of difference that Method offered in the household-goods marketplace.
In support of its program, Method has created a fictional brand - Shiny Suds bath cleaner - that it will introduce with a viral video. Ryan previewed a rough cut of the spot before the ANA audience. The idea, he said, is simple: If Paramount Pictures can use buzz media to create an audience for "Paranormal Activity," why can't a consumer product use the same technique?

The video - created by New York agency droga5 and planned for a late-November/early-December launch - opens on an over-shoulder shot of a woman as she's about to climb into her shower. At once, the shot is voyeuristic and even a bit sinister. But animated characters soon begin to animate the video, in a takeoff of SC Johnson's Scrubbing Bubbles bathroom-cleanser brand.

But there are differences:  SC Johnson's Scrubbing Bubbles are powerful beasts. The Shiny Suds Method animated beasties are more charming, more likeable…  and more forthcoming about the long-term effects of their cleansing work. Yes, the sing, they do a "shine-tastic" job. Yet, there's another message working - one that aligns nicely with Sen. Franken's legislative proposal. The suds simply don't wash down a drain. They keep up their nefarious work long after the showerer has left the stall. "Why are we still here?" one asks. "Because we're chemical residue!"

The idea is simple: You deserve to know what chemicals are in the products you use around your home. "It's all about asking, 'Do we have a brand worth joining? Can we get out of the shadow of mass-marketing?'" Ryan emphasized.

Moving away from that "shadow" encourages a kind of open marketing that builds brand "advocates" (what the seven Goliaths simply call "loyal customers") with a series of attention-getting internal operating styles and external events:

Collaboration: Inside the Method headquarters - which once housed the San Francisco office of BBDO, a "wikiwall" shows the entire workforce work in progress - product development as well as nascent marketing campaigns.  "We listen and learn," the co-founder told the ANA. "The brand lives in our employees' minds." It's an internal transparency that carries out into the brands image - a transformation that Microsoft celebrated in the spring of 2009 with a spot that featured Ryan:

Design: "We look at packaging design as media. We take our products and turn them into design objects that people talk about… It's a constant education for us," Ryan said. "We care about the influence of design. We hear an outsider comment about it and it resonates internally as well. Product/packaging designer Karim Rashid fashions Method packaging in a simple, bright, elegant form that reinforces the brand's messages of all-natural freshness and safety.

Distribution: To ensure sure that Rashid's designs get the right kind of visibility, Method's co-founder continued, "We treat retailers as our clients. It's 'relationship retail.' We try to tell them, 'Here's how we can make your business better."

 
Parking Days: Where Method people keep filling meters with coins and, where there was once a car once filled city-street space, a park suddenly appears in its place.

 Pop-Up "Detox" Stores: In a number of U.S. cities with a concentrated young urban population - among them Chicago, Boston, and Seattle - pop-up stores give would-be advocates a chance to toss out their old "toxic" cleaning products and re-stock with Method goods. Each store, Ryan added, includes "cleaning confessionals" where new advocates can rid themselves of old habits. In Seattle, the media event gained press coverage beyond any reasonable Method expectation, when the city's clean-up crew arrived in brightly colored "hazmat" ("hazardous-material") protective outfits to cart out the discarded materials.

"Command and control" represent what Ryan called "the marketing of the past. Today, it's a two-way conversational world. Wherever marketing is effective, it means participation…. There is no difference between your public and your private face. Parking day, for instance, promotes more green space in cities. You feed a meter, and you do whatever you want. You redecorate a parking place as an oasis in the city for a day. The media shows up and everyone involved becomes a spokesperson for the brand…. It's no longer just enough that people believe that your product works and does what it says. They want to believe in you and what you do. It's a blurring of professional and personal lives."

That's why the home of Method's offices "look more like a design firm, not a packaged-goods company." It's why the staff gathers every Monday morning for a "huddle" that offers a public forum for business updates. It's why every employee has a photograph on the wall. ("Your HR director is really like a [workplace] marketing director. You want to reinforce the idea that everybody is here… That you don't live in a [cubicle] box. That you play a role in the brand."

The internal branding leads to a consistent public face. And it's always about paying attention to detail, Ryan added: "Building a brand about a thousand little new touches. Consistency is only for liars."

Discussing family media matters (from left): Barbara Bacci Mirque, ANA evp; Edgar Sandoval, P&G; and Ben Simon, Walmart.

Photo courtesy of Clarion Pictures

Procter & Gamble "goes out of its way" to find "family-friendly programming," said Edgar Sandoval, P&G's general manager/marketing, North America.

"Moms tell us they're frustrated when they have to 'dive' for the remote control when something inappropriate comes up on the television," he told the 2009 Association of National Advertisers (ANA) "Masters of Marketing" annual conference.

The option - "telling children to look the other way" - is an unacceptable alternative, he added, especially for "the stable, family-oriented products that are so important to our company."

The occasion for Sandoval's remarks was a panel discussion in support of the ANA's Alliance for Family Entertainment. Sandoval co-chairs the organization with Ben Simon, director, Walmart Brand Marketing. And, said Simon, "where your brand shows up means something to moms. You can think about media from an efficiency model, but there's also a quality component that matters to mothers. And we're committed to serving moms and families, to meeting their needs."

Founded as the Family Friendly Programming Forum 11 years ago and rebranded in 2008 to take in a broader scope of media and family issues, the formal mission of the Alliance is "to find, nurture, develop and support high-quality family content on broadcast/cable networks, Internet, mobile devices and gaming platforms, or wherever consumers look for family entertainment."

"Context matters in marketing," Sandoval observed. "You're going to be judged by the company you keep. We build family-oriented products and brands. If those brands [are advertised] in the wrong context, all that effort is for nothing. At Procter, we're constantly evaluating media choices and touchpoints. And we need to pay even more attention to programming, to taking more deliberate care to ensure that it fits in with the brands we're trying to build."

Added Simon, "At home, moms are always looking for inexpensive ways to bring the family together. TV is a great medium for just that. And it's our brand responsibility to her to be actively involved in the programming. It's all a reflection of our brand promise to save money and live better."

"We have a powerful group of 40 advertisers who are working together to affect the media landscape," said Barbara Bacci Mirque, ANA evp. "They're proof that working together, you can do things that you can't do yourself."

And a pile of "stunning" new research further facilitates the task. The ANA Alliance commissioned market researchers Penn, Schoen & Berland Associates to conduct an online study of 2,400 consumers to determine the impact of show content. Considerations included viewers' perceptions of the advertised brands and responses to six TV ads from marketers whose collective advertising spending exceeded $10 billion.

According to Mirque:

• Ad effectiveness increased, on average, 30 percent when they were viewed on a family-oriented show.
  
  
• 90 percent of consumers agree that family-oriented programming is relevant when it has cross-generational appeal, depicts real-life situations, and is family-appropriate in terms of theme, content, and language. "Nobody's ever embarrassed," Mirque explained. "You can watch it with your family."
  
  
• 85 percent of the survey audience said they would "go out of their way" to watch family-family programming.
  
  
• 96 percent of mothers "feel good about family-friendly content.

• Nearly 11 percent of the respondents said that would be more likely to purchase an advertised brand when the brand's ad appeared on family-oriented-as opposed to adult-themed-programming.

Alternatively, the research also showed the downside of advertising placed in incompatible programming environments: "Overall brand perception, reputation, caring and trust were [negatively impacted] when ads for family products were viewed in the adult show.

Although the research program was the group's first piece of proprietary research, the Alliance for Family Entertainment has tapped into the influence of its marketing members and, according to Mirque, "played a significant role in bringing more than 20 family primetime programs to air," including Friday Night Lights, Chuck, Everybody Hates Chris, 8 Simple Rules, and Gilmore Girls.

Sandoval called the work of the Alliance a "win, win, win. It's a win for family brands. It's a win for the programming industry. And it's a win for families."

The 2009 ANA Alliance member roster includes: 

Allstate Insurance Co.; AT&T Inc.; Campbell Soup Co.; ConAgra Foods; Enterprise Rent-A-Car Co.; FedEx Services; General Mills, Inc., H&R Block, Inc., Hallmark Cards Inc., IBM Corp., Kellogg Co., Kraft Foods, Inc.; Mars US; McCormick & Co, Inc.; McDonald's Corp.; Merck & Co. Inc.; Nestle USA, PepsiCo, Inc.; Pfizer Inc.; Schering-Plough Corp.; State Farm Insurance; The Coca-Cola Co.; The Home Depot, Inc.; The J.M. Smucker Co.' The Procter & Gamble Co.; Tyson Foods, Inc.; Unilever United States, Inc.; Verizon Communications; Walmart Stores, Inc.; Walgreen Co.; and Wendy's International, Inc.

The leadership of the Association of National Advertisers (ANA) used the occasion of the organization's 2009 "Masters of Marketing" annual meeting to update an industry mission statement almost 100 years old.

On January 4, 1910, 17 advertising managers from a number of America's leading marketers - that included the Shredded Wheat Co, the Glidden Varnish Co., and Burrough's Adding Machine Co. - formed a new national advertiser association. The group called itself the Association of National Advertising Managers (ANAM) and, in the words of Bob Liodice, current ANA president/ceo, "It was envisioned as a unified voice for those individuals - and therefore a power that could achieve some of the reforms they felt were necessary in this sparkling new advertising industry."

Bob Liodice, ANA president/ceo
Photo courtesy of Clarion Pictures

ANAM's start-up mission statement  read: 'To advance the knowledge of advertising as far as may be possible to an exact science…. To that end, that the individuals, firms, or corporations represented in its membership may expend their advertising appropriations more intelligently and more effectively.'

"It's fascinating how closely the original charter still aligns with our goals," said Liodice. "From its impressive start 100 years ago, the ANA has worked to be at the center of this amazing, dynamic, marketing industry - from its roots in a print-centric age to its mass-media love affair with television to its transformation in the still-unfolding digital age. We've added immensely to the science of marketing, while recognizing and appreciating its artfulness."

But, after a century of commerce - no matter how stunningly the original statement may still resonate in 2009 - the occasion of an anniversary seemed to be an appropriate moment to revisit those January 4, 1910 industry guidelines.

As we celebrate the ANA's 100th anniversary," Liodice told ANA meeting delegates, "we must move … to a new, effective, transparent, economical, and socially responsible model of marketing and media for the future." A new ANA Marketers' Constitution "sets forth what we believe are the 10 essential 'musts' for the next 100 years to ensure that our industry thrives and continues to contribute to the growth of our companies as well as the economic and social well-being of our society."

Added Liodice, "our goal is to inspire the entire marketing community to come together and embrace a successful future…. to commit to 10 key principals that ensure that our industry thrives and continues to add significantly to the economic and social well-being of our society."

1. Marketing must become increasingly targeted, focused and personal

Theory:

"Several years ago, I was asked by a reporter, 'Where would you like to see marketing head?' My response was, 'I would love to see it as mass-marketing on a one-to-one basis.' The future is a world in which consumers receive only messages that interest them - and only when they are receptive to those messages.

Best practitioner:

"Sprint is a great example of a marketer that has deployed behavioral advertising effectively… to personalize mobile Web content for users. For example, someone who frequently checks sports scores will find the home page centered on sports news…. Through behavioral advertising, Sprint continuously learns what content the customer likes on the phone's home page… It encompasses the entire process off consumer-relationship management - attracting, retaining, and growing long-term loyalty.

2. Marketing must build real, tangible and enduring brand value

Theory:

"This is about building brands and brand value."

Best practitioners:

Walmart and Verizon ("taking strong brands and making them stronger"), Kodak and Fender ("taking brands that had lost their ways and restoring them in consumers' minds"), Zappos.com and Method Products ("building new brands").

3. Marketing must become more effective - that means more creative, insightful and accountable

Theory:

Marketing effectiveness rests on three pillars: smart consumer insights; great creative, driven by consumer insight reliably and consistently accountable programs: "Focused, measurable approaches drive business growth and underscore for senior management the substantial return on their marketing investment… True marketing accountability must inform us how well we are building brands and growing businesses."

Best practitioners:

Smart consumer insights: Dunkin' Donuts ("as the recession unfolded, Dunkin' Donuts research revealed the need for a new message that acknowledged consumers' hardships" with text ["kin do"] embedded in the company's name).

Great creative driven by consumer insight: Burger King ("reinvigorated the quick-service chain's brand with a succession of creative, edgy campaigns and promotions aimed at the core audience of SuperFans").

Reliably and consistently accountable programs: Enterprise Rent-a-Car ("built a highly strategic marketing-accountability and effectiveness program in support of its three core marketing thrusts: brand-equity marketing; retail marketing; and loyalty marketing").

4. Marketing must become more integrated and proficient in managing expanding media platforms

Theory:

"Integrated marketing is still more talked about than actually implemented. Marketers want agencies to eliminate their parochial silos; want an end to compensation schemes that favor one medium or discipline over the others; want to strategically approach marketing decisions and media choices in a completely agnostic fashion; want assurance that every marketing resource seamlessly works to build their brands and grow their businesses."

Best practitioner:

American Express Open Forum ("a robust, conversational, authentic communications program that serves multiple purposes - a publication, a blog, a virtual Rolodex, a tech-enabled community, and a collaboration platform").

5. The marketing supply chain must become more efficient and productive

Theory:

"Efficiency as you all know, is different than effectiveness. Marketing efficiency enables us to shorten the supply chain, reduce waste, and improve productivity…. A fundamental key to supply-chain efficiencies is making everything digital. And an absolutely critical tool in accomplishing this is digital identification - also known as Ad-ID - [a tool created by the ANA and the 4A's the foundation of digital workflow, process improvement, and cost savings."

Best practitioners:

Ford Motor Co., General Electric, Motorola, 3M ("all have applied principles of Six Sigma to their marketing processes, allowing them to save time, allocate resources, and make faster, better decisions); Toyota (for its use of Kaizen, "its continuous improvement process"); Hewlett-Packard and Mattel ("'decoupled' creative and production, recognizing these functions employ different skill sets and that supply-chain efficiencies can be achieved when they are separately produced and managed").

6. The marketing ecosystem - including agencies, media and suppliers - must become increasingly capable

Theory:

"An ecosystem is an appropriate metaphor for today's marketing environment. It's a dynamic, complex and interconnected community of advertising, including agencies, media organizations, research firms, and other resources that support marketers in their quests to build their brands and their businesses.

"Marketers need their ecosystem partners to continuously create new ideas and competencies by developing, for example, powerful branded-entertainment vehicles, thought-leading intellectual capital, breakthrough licensing operations, original digital-media properties, proprietary software applications, and ingenious media packages."

Best practitioner:

Denny's, the advertising agency Goody, Silverstein and Partners, public-relations agency Hill and Knowlton ("courageous 'Super Bowl Grand Slam' campaign included TV advertising, online search, public relations, and buzz marketing… to drive huge traffic to Denny's restaurant, reintroduced customers to the chain, and reinvigorated the brand").

7. Marketing professionals must become better, highly skilled, diverse leaders

Theory:

"As we articulate our Marketers' Constitution for the future, nothing is more important than nurturing the talents, skills, and continuous development of marketing professionals. We must attract and nurture people who are completely consumer-centric in their orientation, holistic in their view of marketing and media choices, innovative and creative in their thinking, articulate and effective in their personal communications, and results-obsessed team leaders in everything they do.

"Vitally important to the future success of the marketing industry - and its ability to grow businesses - is workplace diversity… Diverse backgrounds, perspectives, and persuasions contribute to a more inspiring and creative environment - the kind that stimulates marketing processionals to produce the best work possible. Businesses that support inclusion set an example for their employees and positively influence society - at large - by broadly socializing the inherent value of diversity.

Best practitioner:

The ADCOLOR® Industry coalition - a broad-based membership initiative underwritten by the ANA, the 4A's, the American Advertising Federation, the Advertising Club of New York, Arnold Worldwide and Omnicom - "to advance diversity across the entire marketing community."

8. Marketing must be indisputably socially responsible

Theory:

"The essence of great marketing is consumer trust - trust that the companies they choose to do business with respect their personal values and are sensitive to the larger social issues in which they believe…. The future of marketing depends upon the industry being indisputably socially responsible."

Best practitioners:

ANA Alliance for Family Entertainment (supporting "the effectiveness of family programming for marketers"); the Children's Food and Beverage Initiative ("to ensure responsible marketing and promote healthy lifestyles for children"); an industry wide coalition of media and marketing trade associations "to protect consumer privacy in ad-supported interactive media"; the Ad Council; and the Partnership for a Drug-Free America ("a 21-year effort to reduce illicit drug use in America… by the Ad Council, the industry's public-service arm created in 1942).

9. Marketing must be unencumbered by inappropriate legislation or regulation

Theory:

"Delivering the substantial societal benefits must be unencumbered by inappropriate legislation or regulation. Delivering the substantial social benefits of marketing depends on a business environment that is conducive to - and supportive of - our complete industry and its essential work in building brands and growing businesses."

Best practitioners:

"Our exemplary record of self-regulation - a record that dates back more than 40 years to the creation of the National Advertising Review Council and its offshoot, the Children's Advertising Review Unit."

10. The marketing discipline must be elevated and respected

Theory:

"As an industry, we must continually reinforce the fact that, nationally, marketing generates more than $5 trillion in economic activity, or approximately 20 percent of total U.S. economic activity. Sales of products and services stimulated by advertising support generate 21 million jobs - or 15 percent of the total jobs in the country… Building respect for marketing will ensure than we attract the best and the brightest to our profession."

Best practitioners:

A new multi-sourced 2010 marketing impact study ("fresh data for policy-makers, journalists, academicians, and other influencers regarding marketing's immense economic contribution"); the Advertising Educational Foundation ("more and more of tomorrow's college students will see our profession as welcoming, challenging, innovative, and important - one that nurtures and rewards people long term as they build the great brand franchises and growth companies of tomorrow").

“We messed up.”

These three little words are rarely used by image-conscious brand guardians in a public forum.

But, tough times drive tough confessions. And, at the 2009 Association of National Advertisers “Masters of Marketing” annual conference in Phoenix, Arizona three major marketers - McDonald’s, Walmart and IBM - readily used them in front of 1,200 delegates.

For McDonald’s, the mistake was focusing too much on the stores and not paying attention to their key customers. At Walmart, it was slipping away from the founder’s message and mission. And for IBM, the sudden realization of a change in the market conditions that had supported the company for decades meant the startling realization that an iconic brand was on the verge of bankruptcy.

It’s not as if Neil Golden (svp/cmo, McDonald’s USA), Stephen F. Quinn (evp/cmo, Walmart U.S.), or Diane Brink (vp/marketing/global technology services, IBM Corp.) had been fed hallucinatory truth serums. Because with each tale of decline there was a story of remarkable recovery - with marketing playing a critical role.

McDonald’s Refocuses on Its Core Customer

“Fifteen years ago, I was a McDonald’s marketing manager in Chicago,” Golden recalled, “and we were about to begin a national program in support of a new product.” Golden had overseen the local market and believed everything was perfectly positioned for success in the Windy City. “I was so proud of what we were doing. But then, one of the franchisees asked, “What do Afro-Americans think of this product?”

Neil Golden, svp/cmo, McDonald's USA
Photo courtesy of Clarion Pictures

Golden said he was confident it would appeal. “I knew the answer. And I really was proud. ‘Where’d you get the information?’ the franchisee asked. So I checked. ‘We got it from focus groups in malls.’ The nine Afro-American franchisees looked at each other and one of them said, ‘We don’t have malls in ghettos.’”

“To me, that was a symbol. As much as we were committed [to multi-cultural advertising], the way we were going about it was all wrong. And I made a promise to myself: We would never get into that position again, where ethnic advertising was an afterthought.”

Golden was reminded of that lesson in the early 2000s. “It was a troublesome time for McDonald’s. Our business lacked direction. Our sales counts were down. Our guest counts were down. We were way out of balance on how we promoted our brand.

“We had become more focused on ourselves and less on our customer.” Customer promotions ruled the marketing program “and we were subordinate to our partners. We needed to reinvigorate the brand.”

With a product advertised in 10 languages in more than 100 countries, the opportunity was ripe for an expansive branding effort that would bring one voice to the world’s most successful fast-food marketer.

“The last time we’d marketed the Big Mac without some form of consumer incentive was back in 1988. Think of it: We had not supported the brand’s flagship. But, for the first time in 20 years, we got the confidence back. The approach worked. And we knew what potential we had in front of us.”

McDonald’s went global with its new “I’m Loving It” theme is 2003:

Six years later, McDonald’s has 58 million customers a day in 32,000 stores around the world. In the U.S. alone, 26 million daily customers find sustenance at 14,000 different stores. In 2009 “I’m Loving It” - McDonald’s longest-running theme line in its history - had 10 percent recognition, both the actual language and its association with the brand.

Since 2002 - the year McDonald’s put what Golden called a “plan to win” focus on its marketing program, sales have increased 45 percent; customer count is up 20 percent and cash flow 54%. Other vital-sign increases included cash flow (50%), market share (24%), and brand equity (9%). In America, the business has grown by $10 billion (or $750,000 per restaurant), attracting an additional 1.8 billion customer visits each year (or about 75,000 per restaurant).

And, even in the face of such powerful numbers, Golden said, “we needed to focus on each and every individual’s needs, one customer at a time.”

Research identified four key audiences for McDonald’s: young adults, mothers, children and Asian-Americans.

“Our broad guiding principles were simple,” Golden told the ANA audience. “We were going to focus on the consumer. We were going to concentrate on the ethnic consumer. And we were going to market what we serve” instead asking each store to adjust its servings to a variety of promotional offers.

“We needed to have confidence in our menu to drive long-term growth. And we needed to commit to growing the business by being better, not just bigger…. It wasn’t about increasing the number of restaurants throughout the world…. The quality had to be there for our customers.”

In the U.S., the company’s investment in multicultural advertising matches the demographic profile of the country as a whole, the McDonald’s CMO continued. With Hispanics representing 15 percent of the total population and Afro-Americans and Asian-Americans 12 percent and 5 percent, respectively, the ethnic marketing budget is broken out to represent those same numbers.

As a whole, he added, “the Hispanic, African-American, and Asian-American segments are large and growing. “While they represent 30 percent of the U.S. population, they account for 40 percent of McDonald’s business. Moreover, “combined, they represent 50 percent of our business under the age of 13.”

So when the company does focus groups, it makes a particular effort to listen to these groups. “If we’re doing nine focus groups, two will be Hispanic, two will be Afro-American, and two will be Asian. It’s the best way for us to develop the deepest insight in the products we’re offering.”

McDonald’s ethnic agencies - including Burrell, which dates its Afro-American agency-of-record status back to 1972 - are each challenged to build marketing plans “two years out. We give them a blank page,” said Golden, “with no constraints” beyond the “I’m Loving It” line.

And the creative results demonstrate the diversity of the creative mix. For Hispanic media (and audiences), ads in support of the new McCafe offerings emphasized the target’s “discerning taste - the ability to instantly detect premium quality and a rich flavorful taste,” Golden explained.

For Afro-Americans, Golden continued, “it’s more about indulgences - ‘sweet love in a cup’ - than it is about the coffee.”

And for Asian-American audiences, McDonald’s McCafe advertising features the importance of healthy, freshly prepared natural ingredients.

Similarly, advertising that supports McDonald’s Angus Third Pounders has “a bigger-than-life personality for Afro-American customers because our research tells us that this audience has a greater affection for big burgers; for Asian-customers, by contrast, the message, again, will be “fresh, quality ingredients and different toppings on a quality product.”

The message, according to Golden, is for marketers to “embrace the fastest growing segments that set the trends for everyone else. Ethnic segments are leading lifestyle trends. Pursue them with relentless focus.”

Walmart Gets Back to Basics

It was hard to argue against the numbers: In the 1970s, sales for the store that had begun as Sam Walton’s Five and Dime had totaled $31 million; the figure grew to $1 billion by 1980, $26 billion in 1990, $156 billion in 2000, and $406 billion in 2008.

But, according to Stephen F. Quinn, evp/cmo for Walmart U.S., “the company lost its way a few years ago… We had a fragmented view of what the company had become.”

Stephen F. Quinn, evp/cmo, Walmart U.S.
Photo courtesy of Clarion Pictures

Behind Quinn, on an ANA “Masters of Marketing” screen, flashed a tear sheet from the pages of Vogue magazine - evidence that the country’s most reliable brand had oddly become kind of hip.

“In a world of increasing affluence, we were asking ourselves, ‘What’s our role?’ And we were getting consumed by the question. When we look back it, we’re kind of embarrassed by that work. Everybody was trading up. But we needed to get back to where we were as a company.

“If you’re not important to your customers, you won’t be important to them in the future. Focusing on our people is what’s important to Walmart.” And, as for the tear sheets from Vogue and the up-marketing efforts: “I’m glad we were able to give everybody a good laugh.”

The timing for its back-to-basics change was fortuitous, indeed, for a couple of reasons. For one - unreferenced by Quinn but all but a white elephant in the audience of marketers - marketing at Walmart had been discredited within the organization when a scandal involving the CMO and her selection of a new agency became front-page trade-press news. For two, the shutting down an emphasis on entrepreneurial growth came just as the country’s entire economy was about to begin pointing downward to recession.
For lack of a better expression, the world didn’t need a new Walmart. But it desperately needed the back-to-basics save-money-live-better message of Sam Walton. “Marketing at Walmart had done a good job, but we mistook being entrepreneurial and decentralized as a virtue in and of itself. We lost our focus on the customer and the brand. We didn’t have the fundamentals of the brand inside the company.”

Even as the media and marketing professions struggle with which digital metrics best reflect consumer interest and engagement, Quinn explained that Walmart has a fundamental piece of measurement that, week-in-week-out, reflects the state of commerce better than any algorithm: The paycheck. People don’t come to Walmart to browse; they come to shop for fundamentals that keep their households running.

“When people are getting paid, they buy diapers and food for their family. When they’re not getting paid enough, they put off those purchases. They’re literally not eating at the end of a month. And, though the cycle is a familiar one, it has become more exaggerated in recent years, “challenging our supply chain to keep up with the change.”

In the last 12 hours of the last day of the month, he told the ANA audience, sales on a year-to-year basis have declined anywhere from 10 to 15 percent. By contrast, they’ve increased by as much as 200 to 300 for the 12-hour shopping period that begins at midnight of the first day of the next month.

“Our customers are people who need real tangible solutions,” Quinn said, “not ad campaigns.”

Sam Walton grounded his company in a simple philosophy: If we all work together, we can save money. And, if we save money, we can live better. The challenge for Quinn and the Walmart marketing team was to move away from the notion of a global business presence and return to the home-spun dynamics of a friendly, local five-and-dime store.

The first step in bringing Walmart back to basics is this: “Know what you can change and know what things you shouldn’t touch.” The part of the culture that Quinn said he “wouldn’t dream of changing” include “the culture built around finding ways to lower costs; around focusing on the supply chin. When your company benefits, our company benefits, and that works all the way back to the farmer’s field.”

In fact, it’s just that kind of reliance on partnerships that may be more important than ever before: “We can’t lower prices if we can’t lower costs.”

But, allowed Quinn, “parts of culture do need to evolove…. We just need to figure out what we should stay away from touching and what we can enhance. Less sacred items are “what’s going on inside the store” - everything from merchandise to logos to labelling to aisle width.  “And everything should reflect on what’s going on with the customer.”

Walmart customers are not a monolith. In fact, Quinn said, the retailer has identified three subsets: price-value shoppers; brand aspirationals; and price-sensitive affluents. Among all three groups, however, what has not changed is their perception of Walmart value. “We can lower the cost of living for everyone, to help them have a better life.” But, in 2009, there is one difference: “What has changed is our urgency in delivery” on the brand promise.

For some brand marketers and competitive retailers, that “urgency” leads to a point of contention: “We’ve been cleaning up our private labels and turning them into brands,” Quinn said. “In many ways, we are becoming a house of brands. There are customers who need our products to feed their families. And that plays a role in how we deliver value.”

Affordability and price remain a primary consideration. But, he added, quality still leads, as evidenced by Walmart’s line of Better Homes & Garden furniture: “It’s not just price. It’s a better life. It’s style and it’s great stuff,” said Quinn.

In another customer-centric element of the Walmart turnaround, Quinn described how the retailer has spent “billions of dollars on store experience, trying to determine what that experience needs to be.” To that end, management has pulled “a ton of inventory” from the aisles to open up the store, removing an element of what it calls “actionality” and decreasing the occasion of impulse purchases.

The result is that “experience scores have gone through roof as shoppers have more room to manoeuvre within our stores…. We’re betting that a better customer experience will be a stickier - a more valuable - customer experience.”

Has the transformation worked? “We’re known for who and what we are,” said Quinn. “We spent a lot of years as David. And, at some point, we discovered we were Goliath. We didn’t use our size for good and that wasn’t so popular…. We want to be held accountable for what we do. We want to use our size for good.

“The future will be more competitive than the past. Amazon has revolutionized customers with its goods and services. That keeps us on our toes. [Our] target - [to be] the best marketer in retail - inspires us to be competitive. …. But the future also is about who you serve and what she hires you to do. Be good to your customer. Stay with her. What she’s thinking about is tomorrow –about what she wants tomorrow.

“There’s only one boss - the customer - and she can fire anyone, from the chairman down, by just deciding to shop somewhere else.”

IBM: To the Edge of the Abyss… and Back

The timeline - as expressed through a series of Fortune magazine covers - tells the story of the last quarter-century of IBM sharply and succinctly. In 1984, the company was recognized as one of the world’s “most admired” brands. Eight years later, in 1992, it had become a “dinosaur.” But, by 2004, it was on the rebound. Although the editors of Fortune would not commit to a complete recovery, they were willing to ask. “Can IBM Get Smart Again?”

"We learned a hard lesson,” said Diane Brink, IBM vp/marketing/global technology services. “We were near extinction. And we had an acute need for leadership… to redefine what our business meant in terms of service to others.”

Diane Brink, IBM vp/marketing/global technology services
Photo courtesy of Clarion Pictures

The leadership came with the arrival of Louis V. Gerstner, Jr. in 1993. And, with marketing helping him drive the enterprise, IBM’s transitioned from what Brink called “a company that sold components” to a “company that sold business solutions” - from a provider of hardware to a provider of consulting services.

As a company on the edge of disaster, Brink told delegates that IBM “had lost focus on our clients and our industry. But we survived that near-death experience. It was sobering. But we went through a series of inventions, constantly redefining who we are.”
 
Where IBM ended up was in a “smarter place,” with  “clearer value to clients, and increased profitability,” Brink said. “We successfully remixed our portfolio, with 80 percent [of our business becoming] software and services that meet the needs of our clients.”

Performance metrics stand witness to the transformation. According to Brink, IBM experienced record revenue, profit, earnings per share, and cash flow at the end of 2008 - steady growth that, she added, has continued through the third quarter of 2009.

The company that had brought the world the PC, barcodes, and a massive amount of research on the human genome had refocused its efforts on a connection between business and humanity. And it had done so well in advance of its 100th anniversary on June 15, 2011.

Inside IBM, leadership embraced the cultural changes that would lead to increased value for IBM clients. For integrated marketing - the company’s largest business unit - that challenge translated to a three-point program, as articulated by Brink:

• “Focus on value”: Drill down on the company’s core clients, do more with less, and ensure that there’s a premium placed on value and innovation.
  
  
• “Embrace and exploit opportunities”: Be aggressive in the pursuit of opportunities and new strategic partnerships.
  
  
• “Act with speed”: Empower managers with capability and the culture to embrace change while transparently managing risk.”

“Our leaders, businesses and institutions have the opportunity to change the way the world works by focusing on these three things,” said Brink.

“The world is smaller and flatter,” she continued. “But being able to connect is just not enough. Our planet also is becoming smarter. We have the ability to apply intelligence to challenges and ambitions - to just about everything. We can build a case for changing progress, challenging the status quo, and creating new value for ourselves and for clients. Great things are possible if we bring a new level of intelligence to how the world works, how everyday systems interact. It’s a chance to do better, to be efficient.

IBM’s vision of a “smarter” planet includes instrumented people, interconnected companies and institutions, as well as intelligent combinations of man-made artefacts and nature’s systems. To achieve it, Brink explained, will require “back-end systems to leverage data and analytics to create real-time insights.”

And its applications will include fields as diverse as health-care management, transportation and infrastructure, water management, and oversight that includes the authenticity of pharmaceutical offerings as well as the security of currency exchanges.

To connect with so many diverse perspectives, IBM is relying on a strong digital presence.

“Just about a year ago, we started a rich conversation with the world,” Brink said. “Now is the time to fuse intelligence into literally everything to change the way the world works. With intelligence, we all will live and work better, in all sizes of institutions and in all kinds of organizations. Businesses require intelligence to make safer decisions.”

And IBM, she added, will be the service provider, even though its role will be less immediately visible: “No one really sees our logo any more. Our logo isn’t seen. But the substantiation of our mission - to create a smaller planet, to reflect global realities - is not just what we talk about. It’s what we are. Essentially, it’s all around us. It affects each of our lives…. We’re leveraging everything we have to be relevant, to have real-time conversations all over the world.

The marketing effort in support of the broad-based effort reaches throughout the corporation, from advertising to its client centers, recruiting, media relations, event-marketing, social media, business partners, employees and alumni. “We’re listening efficiently in real time,” Burke explained. “We need to speak to many different audiences, to convey who the brand is. [We’re talking] in new and innovative ways to C-suite managers as well as college students. We’re on LinkedIn, Facebook. Blogger, Tumblr, and Twitter. We want everybody involved in our conversations.

“Employees understand the role they have. For prospective employees, and our clients, we help them understand [our culture of] deep know-how, of being innovators, of embracing deep forms of discovery.”

And, in terms of turning the IBM brand around, she added, “We collaborate to think, to make the remarkable possible. There are no problems too big to solve. When everybody thinks, everybody wins.

“The key precondition for real change now exists. A period of discontinuity is a period of opportunity for those with courage and vision. We’ve established a point-of-view. The ‘smarter planet’ is relevant and gaining momentum. It’s who we are. It’s what we do.”

For Yahoo's day one video highlights of the ANA's Annual Masters of Marketing Conference, see the ANA website.

There you'll find a selection of interviews and reactions from key speakers and conference delegates on this question of the day:

What is the one piece of advice you'd offer to a company having a tough time in this economy?

Even the head of the world’s most powerful brand can dream: “I want to walk up to Gate 37 and I want my phone to tell me if my plane is on time. If the plane’s not there, I want my phone to tell me whether it’s going to show up. And, if it doesn’t, I want my phone to predict my level of frustration.”

It’s fair to say that no-one dreams like Eric Schmidt, Google chairman/ceo, and that no one is better connected to translating the imagination into reality.

“Technically, it’s all possible today” he told an audience at the 2009 Annual Convention of the Association of National Advertisers (ANA) of his request for instant one-to-one airport updates. “The opportunity’s there. And, if we can do it at Gate 37, we can do it at any gate.”

Eric Schmidt, Google's Chairman and CEO
Photo courtesy of Clarion Pictures

A smartphone connection to GPS can identify and place a location, inside or outside an airport. “Mobile phones are not just phones. They’re computing platforms. They tell where you are. Predict where you’re going. If you take a picture of someone, they tell you who it is. It’s like taking a supercomputer with you.”

Add to that hardware cloud computing - the wireless ability to access information about consumer habits, behavior and even moods - and mobile phones can carry enough information to make predictions about any individual.

“You’ve got 885 million smartphones out of 3 billion mobile phones worldwide,” Schmidt explained. “Within a year, more people will be using their smartphones than PCs to access the Internet. These devices are like supercomputers - attached to humans - that they can carry wherever they go. And, with clouds of wireless networks, all sorts of analyses are possible.£

And, for advertisers, the consequences are unimaginable - perhaps, even to the man who runs Google:

“This is the dawn of a new revolution in advertising, with highly targeted, highly measurable advertising. And the technology that drives it will enable another generation of very creative people to build advertising firms, to do great work, to drive narratives and stories through new technologies and to use the human connections to produce new products.”

“Here’s my fundamental message: we’re about to see an acceleration in technological platforms that, for marketers, will be on a scale rivalled only by the arrival of color TV.”

Schmidt is confident that economic recovery is imminent. (A good part of his confidence, he said, is based on “huge upticks” in such discretionary expenditures as “restaurants, nightlife, tickets, and dancing”). “The worst is behind us.”

But, he added, the turmoil of the recent past should shape a more challenging future.

“Whenever there is a collision, controversy, or discontinuity, you begin to look for opportunity…. When everything became unstuck, we had time to build some interesting new infrastructure.”

The widespread popularization of new hardware has contributed to that change, and Schmidt noted that the public has embraced mobile devices eight times faster than it welcomed PCs - a familiarity that largely explains the fact that the amount of data downloaded on mobile devices has increased 50-fold in the last three years).

But change has also been driven by more efficient means of accessing data on those devices. The new dimension of cloud technology, in particular, “makes information largely free, available anywhere in the world. Consumers can access data tools without any other support. That means that everything is global from the start. And marketers can discover customers everywhere.”

Such scale, Schmidt admitted, is “both exciting and horrifying. It’s exciting in what it allows you to do. But there’s also reason for concern: A small start-up can claim instant multi-national status and attack [a brand] from a corner previously unimagined.”

The good news, he added, is that in such explosions of products and technology, “advertising becomes more important. It’s one of the most fundamental ways to sort out information. And that’s the gift of advertising - to connect with people in a human way - to make the kind of emotional connections that are at the core of story telling.”

And, as technology leads to more transparency through such social-networking services as Facebook and Twitter, he continued, “advertising becomes even more important…. Everybody knows everything. You have real-time feedback that wasn’t even possible five years ago. Not sure how to run your business? Just ask. You’ll get bad feedback as well as good, but the whole notion of openness is important.”

And marketers must learn to adjust to the technological realities that have changed the way consumers shop for products. “You can take a picture of an [in-store] bar code and immediately tell if the product’s cheaper someplace online. [Marketers] may not want that information [in distribution], but even if they don’t want it, the customer is going to get it.

“That means you have to entertain and engage in new and entertaining ways.”

From a brand perspective, the Google chairman/ceo told the ANA audience, “you have to earn your way, customer by customer, product by product. Now, with this information explosion, there’s a test every day.”

At both the search and application levels, Schmidt says, “the scale is so large that it’s hard for us to even believe our own projections at Google. The next generation of applications will bring automated reality. You’ll get the history of a place [you’ve just visited] as well as [a preview] of where you’re going. It will be far more multi-dimensional than a TV, a PC, or anything like that.”

With such capacity, he contended, advertisers no longer should even consider the possibility of small campaigns: “Stop thinking about small. Think about campaigns of scale. Scale is there… Evian posts a video of babies [rollerskating] and gets 30 million people who are willing to search it out, download it, and view it.

“A fun video of people dancing through a wedding ceremony gets 10 million views in its first week.

“This is the kind of cleverness that you and your agencies all possess. It can help you distinguish just how smart you are. Ask yourself to be bigger. Scale allows it.”

Not only is scale suddenly practical, Schmidt continued, but it offers a quantifiable product. “With this new architecture, everything is measurable. And that’s good for advertising… In the old model, we would design something, launch it, and wait six months for the result. The new model is that you do the same thing every day. You can measure to the second. So, you prototype early and often. You measure. You iterate.

“And the faster you can run that cycle, the more successful you’re going to be in getting revenue to the company. And that’s what your company - and your advertising - should be all about.”

Considering how quickly the rules of engagement have changed, Schmidt said, “I remember when we started calling televisions, ‘color televisions.’ And everybody in this room now talks about ‘cellphones.’ Go on a college campus and they just call the same devices, ‘phones.’ That kind of change is disturbing. At least to me….

 “Facebook and YouTube, combined, account for 10 percent of all consumer time spent online. And they didn’t even exist three years ago. And, they’ll be something after them. And something else after that.”

The “revolution” in marketing will be large, he suggested, and it will come in a hurry. To illustrate the speed of the accelerated revolution, Schmidt provided a quantitative analysis. From the beginning of recorded time to the end 2003, he noted, mankind managed to create some five exabytes (equivalent to one billion gigabytes) of information.

“Now, we generate that much data every two days… And you wonder why you’re stressed out. Or you can’t find your children.”

Or why, even if the technology theoretically is in place, you can’t find out what’s happening at Gate 37.

The cover of the program for the Association of National Advertiser's (ANA) 2009 "Masters of Marketing" annual conference doesn't mince words:

"GROWTH," it announces in capital letter, "Defying the Recession."

As bold as the language may seem, however, does the upper-case enthusiasm imply accomplishment or promise?

"We're not there, yet," allowed Bob Liodice, the organization's president/ceo, on the eve of its assembly in Phoenix, AZ. "But we're in the process of getting there. Some organizations, in particular, have distinguished themselves with their marketing know-how. And, we plan to feature their accomplishments.

 "In today's environment," Liodice has observed, "it's critical for marketers to come up with new strategies and ideas to drive growth." And, at the 2009 Masters of Marketing sessions, Liodice advised that four companies - represented at the ANA by four marketers - are, in fact defying the recession by reinventing the process of growth:

Stephen F. Quinn, evp/cmo, Walmart U.S.

"Walmart has successfully reinforced the perception that they're improving people's lives with value-based products," Liodice explained. "And that's resulted in a permanent improvement in their share of market in the toughest of economic times."

Eric Ryan, co-founder/chief brand architect, Method home-care and personal-care products

"Method has grown from nothing, redefined an industry with its line of environmentally friendly household products," the ANA head observed. One of the fastest-growing privately owned companies in America, Method has "single-handedly turned the consumer-packaged-goods industry on its head."

Diane Brink, vp/marketing/ global technology services, IBM Corp.

By transforming one of America's most legendary brands from a hardware supplier to a software underwriter of business services - all the remaining focused on long-term brand strategies and enhancing its renowned marketing accountability program - IBM not only has become a different kind of company but also "found new ways to serve new business-to business customer needs."

Jeffrey W. Hayzlett, vp/cmo, Eastman Kodak Co.

"I think we're all rooting for Kodak," Liodice volunteered. "I cannot imagine any instance where the sudden introduction of technology has done any more damage to a company." In the middle of 2009, Kodak announced the end of Kodachrome, concluding 74 years as a powerful photography icon. "But," added Liodice, "Kodak has completely overhauled its revenue structure and built a growth-focused platform that positions it well for the future."

The ANA Annual is the organization's 99th such gathering and, surprisingly, will be every bit as large as the 2008 and 2007 meetings.

In addition to the four marketers Liodice signaled out as "heroes" of the profession, the conference attendees also will hear from senior marketing officers from a number of other major U.S. companies including Best Buy, Charles Schwab, ConAgra, Dairy Queen, Dial, Dunkin' Donuts, Fender Musical Instruments, Fidelity Investments, General Mills, Google, MillerCoors, McDonald's, Procter & Gamble, and Verizon.