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As if potentially fatal health consequences, increasing implementation of banishment, rising prices, major advertising restrictions, falling consumption and the recently-imposed highest tax increase in federal history weren’t problems enough, tobacco marketers have been dealt another blow.

Last Monday, President Obama signed the Family Smoking Prevention and Tobacco Control Act into law, new legislation that places tobacco products under the Food and Drug Administration's regulation for the first time. With that bold move comes even tighter marketing restrictions, including replacing ads and store displays with black-and-white text and banning outdoor advertising within 1000 feet of a school or playground.

Philip Gorham, an equity analyst who covers the tobacco industry for Morningstar Inc. in Chicago, told Marketing News that cigarette sales will likely drop in the high single digits for the year, following a 3 to 4% annual decline since 2001.

Richmond, Va.-based Altria Group Inc., parent to Philip Morris, actually supported the measure, likely because as the nation's biggest and richest tobacco company, with profits exceeding $3 billion last year, it is likely best equipped to alter its products for renewed F.D.A. approval, according to The New York Times. Other companies, such as Winston-Salem, N.C.-based Reynolds American Inc.’s, are against legislation. The company's director of communications, David Howard, conceded to Marketing News that "there are changes that are going to happen down the road, and we are going to effectively compete in the marketplace under those guidelines. It will require us to continue to be creative.”

Until the changes take place, Big Tobacco will stick to the already restrictive playbook. Altria's Philip Morris USA Inc. is focusing on increasing its direct mail database for its cigarette brands, which currently contains information on around 30 million customers, via consumer outreach in bars and promotions like last summer’s Flavor Chase sweepstakes, which touted more than 88,000 prizes, says spokesman Greg Mathe. Reynolds' created and marketed a new cigarette product last fall, Camel Crush, that comes with a menthol capsule in the filter that can be opened during smoking. Through direct marketing and in-store, the product was pitched with a “Squeeze, Click, Change” tagline, and promoted at nightlife events around the country. And as the federal tax increase took effect in April, Reynolds’ offered temporary price reductions for Pall Mall cigarettes to increase market share.

But the future may well be in smokeless, which is growing by about 6 to 7% a year, Gorham says, partly because of new products positioned as more socially acceptable.

Camel Snus is a spitless tobacco, released nationwide by Winston-Salem, N.C.-based Reynolds American Inc.’s R.J. Reynolds Tobacco Co. earlier this year. The tobacco comes in a pouch that sits in the mouth.

Reynolds distributes various snus lifestyle guides to direct mail subscribers, following positive feedback from the first batch sent in February. Snus is sold cold from its own refrigerated case to signify freshness, says Rob Dunham, senior vice president of consumer marketing for R.J. Reynolds Tobacco. Images of Camel Snus in ads and on its Web site show beads of clear water lightly coating tins, nestled against a cool blue backdrop. An ad in People came with the tag line, “Your cigarettes may get jealous.” Philip Morris is developing its own Marlboro line for national distribution, while test sales in Indianapolis, Columbus and Portland continue for a Camel tobacco product that's totally dissolvable, Dunham says.

This all goes to show that even an allegedly unmarketable product can still be marketed - which, shameless plug, is the theme of our July 30th cover story, which explores how marketers for U.S. automakers, banks and business travel and other troubled industries are trying to sell their wares at a time of incredible scrutiny and financial difficulty. Coming to your mailbox soon members.

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In a recent survey of 270 marketers, PR professionals, advertisers and others conducted by the American Marketing Association and Fleishman-Hillard, more than half of the respondents said they believe that sustainability involves finding a balance between human, natural and financial resources for long-term benefit. That's a pretty broad definition with regard to how sustainability might fit into your everyday business practices, but it's a good start.

The good news is that some companies are committed to taking the lead on sustainability; others are working hard to incorporate sustainable practices however and wherever they can.

At a breakfast meeting this morning hosted by Fleishman-Hillard in Chicago, FH execs joined Don Bartell, senior director of environmental initiatives at Motorola; Francesca DeBiase, vice president of worldwide supply chain management at McDonald’s; and Jamie Firth, senior vice president of corporate communications at Exelon in a panel discussion of each organizations' goals, hurdles and achievements regarding sustainability.

The discussion unearthed several interesting insights:

McDonald's DeBiase said her company is working hard to clean up its act internally and working with its suppliers to help them do the same. More importantly, though, McDonald's wants to work its way up the supply chain to the growers and ranchers, helping them to reduce their very significant carbon footprints. (Think gassy cattle.)

Meanwhile, Exelon's Firth said "the recession has been an opportunity" for his company to promote energy efficiency. Consumers already are mindful of their energy bills these days, so Exelon has accelerated its advertising and customer outreach to educate consumers about energy usage and conservation.

And Motorola's Bartell said his company is producing more energy-efficient phones made from recycled content; promoting mobile phone recycling by including recycling envelopes with new phone purchases; and even forgoing including paper manuals with some new phones-- "you guys never read the manual anyway," he said to laughs from the audience-- and instead prompting phone buyers to go online for information.

The most interesting insights related to how sustainable efforts can be measured and whether they should be marketed.

Firth said measurement of the impact of sustainable practices remains elusive. And companies should be humble about their sustainability efforts and careful about asserting any direct impacts from those efforts.

Motorola's Bartell, however, said measurement still is necessary to create a baseline. "You don't know if you're getting better if you don't measure. You gotta start," he said. At Motorola, sustainability efforts are less about marketing and more about honest effort, he said. "There hasn't been a whole lot of chest-thumping. We are not screaming from the mountaintops. ... There's not a lot of bravado involved."

Maybe the question is whether you should market your sustainability efforts, or whether you should let those efforts market you. There's much to be said for letting your actions speak for themselves.

Where do you stand on sustainability? Do you market your efforts? Do you consider them a normal order of business?

On a similar note, Marketing News staff writer Piet Levy is working on a story about how you can become credible enough to make green marketing your specialty and whether that's a sustainable pursuit. If you have any thoughts on that topic, please feel free to contact him at plevy@ama.org.

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The wildest speaker at AMA Chicago’s BrandSmart conference last week was concluding presenter Amy Curtis-McIntyre from Hyatt.

As a journalist trying to get useful information for you, I cringe when conference speakers stick to a boring script. Curtis-McIntyre was fresh, informative, entertaining and a bit shocking for some (you don’t often hear four-letter words in formal business presentations; those are usually reserved for meetings back in the office. For the record, as someone who grew up in Brooklyn and went to high school in Manhattan, I was far from shocked. It was more like a mini-homecoming for me.)

Along the way, she also was honest, noting, for example, that Hyatt’s “brand strategy is confused.” She also echoed an earlier speaker when she said, “I think marketers over-complicate things because they can.”

Another great piece of advice: “turn anything you have into a marketing tool,” she said. She discussed how she did that as the first CMO at JetBlue Airways, getting involved in everything from designing crew uniforms to a spoof about doing yoga in the aisles of planes. She recalled how she explained to the JetBlue CEO at the time that it was good people were stealing yoga instructional seatback cards she’d created – it showed they were interested and feeling connected to JetBlue.

If you create promotional materials for a marketing effort and people don’t take them, you’re in trouble, she noted (although in far more colorful language than I’m writing here).

Posted by John at 10:28 AM | Permalink

I spent a fascinating day last week at an AMA Chicago chapter annual conference called BrandSmart, hearing a wide range of ideas about how marketing should be working these days.

Andy England, CMO of MillerCoors, advanced my favorite concept. “The best ideas are simple,” he said, and then discussed how involved it is to keep the best marketing ideas simple and direct.

Research, testing, product development, all important and necessary, but don’t let those divert you from finding and using simple ideas that connect with your core audiences and speak to them. His examples of brands keeping it simple, successfully – Apple, Mini and Acura.

One of his other talking points was that business is a team sport. Appropriate for him, since he’s bringing together the marketing teams at what had been rival brewers Coors and Miller into the new MillerCoors marketing group.

The old rivals are moving into a new joint headquarters in Chicago this summer. He expects them to be settled in by the end of August. Asked how he’ll overcome old competitive issues, he talks about playing to common treads everyone in his group will have regardless of which brand they marketed in the past –“we’re all in the beer business and we all want to win,” he said.

England was one of four winners of a new award established this year by the Chicago chapter. Other recipients of the BrandSmart Award are Amy Curtis-McIntyre, SVP of brand communications at Hyatt; Kim Feil, CMO of Walgreen Co.; and Phil Kotler, renowned marketing professor at Northwestern University. The chapter plans to make these awards an annual occurrence.

Posted by John at 10:03 AM | Permalink | Comments (1)

But it may not be the "R" word you think.

Jeff Hayzlett, CMO for Kodak and immediate past chairman for the Business Marketing Association, summed up the Chicago conference best during lunch Thursday, saying that as he looked out over the room of attendees, he didn't see a recession, but a resurgence.

And resurgence was the primary theme throughout many of the conference sessions, featuring such marketing stars as Joe Pine, Al and Laura Ries, and leaders from JP Morgan Chase, Aon, Navistar, Google and elsewhere. Many of the seminars dealt more with emerging practice versus the economy. The recession rages on, but marketing mentality, at this conference anyway, seems to have moved on.

Even the economy has to a certain degree, Strategic Horizons co-founder and The Experience Economy author Joe Pine argued during his presentation Thursday. After transforming from an industrial to a price-centered economy, with some focus on goods and commodities along the way, Pine says it is valuable experiences that consumers want now, not merely stuff. Starbucks may be selling a commodity - coffee - but its price point is justified by the Starbucks experience. ING Direct also provides European style bistros at some urban locations, while American Girl stores provide memorable experiences for girls, such as a tea room, photo studio and hair salon, not just a bunch of dolls on the shelves. The idea is that people respond more favorably, and spend more generously, on something that provides a deeper emotional meaning than a bare commodity or service or business transaction.

Following Pine, Sam Sebastian, director of local and B2B markets for Google, shared some new data regarding Web usage for the C suite, small business and government, with 73%, 93% and 100% of people, respectively, using the Web to conduct work related research. Other findings showed 80% of small businesses find search engines to be most effective for online research, while nearly one in five C Suite responders said they would rather watch video than read text. Plenty of outreach opportunities, Sebastian pitched.

His talk paved the way for several digital discussions throughout the day. During the direct digital marketing session, three factors for successful e-mail campaigns were shared: test and measure subject lines, placements, links; segment and optimize data; and target and personalize content. Later in the day, LinkedIn's director of advertising sales and operations, Steve Patrizi, shared five ways to maximize the Web site's business potential: leverage your best assets, listen to your customers, target and engage them, converse with them, and experiment with the features. The mantra for the B2B social media seminar - you can do it, and you should do it; even if you're worried about time and management approval, you can ask for forgiveness later.

Not everything was about the future. The father and daughter Ries team discussed business blunder after business blunder for their Friday morning presentation promoting their new book War in the Boardroom, which showcases how management and marketing approach business differently. Not surprisingly, the Ries' suggested that too strong a managerial mentality, without clear marketing perspective, is a problem. A major reason why General Motors got into so much trouble, Laura said, is because it neglected to clearly define its brands like other companies (Toyota = reliable; Volvo = safety, Mercedes-Benz = prestige). Similarly, New Coke and Crystal Pepsi may have been deemed smart moves by management, but without the big picture that marketing provides, they bombed. Consumers wouldn't buy into the packaging of New Coke and deemed Crystal Pepsi "too watery" strictly because of its appearance.

All in all, grand sessions and teachings, many of which may be revisited in future Marketing News stories. We're already slated to run a column about BMA conference speaker Al Salitel, vice president of marketing for Navistar International Corporation, written by the presentation's moderator, MN columnist Michael Krauss. Keep an eye out for that.

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Summer has (nearly) arrived and verdant growth surrounds us. Unfortunately, the word "verdant" might not be used to describe the growth in the marketing research industry these days.

As Jack Honomichl writes in this year's "Honomichl Top 50" report of the top-ranking marketing research firms in the United States, "real growth" in the U.S. marketing research industry declined in 2008, the first such downturn in more than two decades.

In the June 30th issue of Marketing News, our research issue, Honomichl analyzes the top 50 firms (determined by revenue) plus 146 member firms of the Council of American Survey Research Organizations. And this year we've added a variety of tables and charts to further illustrate Honomichl's findings.

We've also added a handful of experts' predictions of upcoming research trends, as well as a Q&A with Kantar Group CEO Eric Salama and a story on what research buyers are looking for from research suppliers this year.

The June 30th issue of Marketing News will be hitting your mailbox next week. Please take a look and let us know what you think.

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This spring, GfK Custom Research fielded an international survey on the level of trust held for various professional groups and organizations by consumers. The findings for marketing-related professions were lackluster, at best. Other professions in the bottom third of trust value included politicians (18%), banks (37%), trade union representatives (43%) and lawyers (47%). Firefighters were deemed the most trustworthy professionals, earning a 92% trust value. What do you think? Why do people have a poor opinion of the profession?

% of respondents who trust the various professional groups
Marketing Researchers 55%
Journalists 41%
Marketing Professionals 39%
Advertising Professionals 28%

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Our June 15th issue features excerpts from an engaging discussion with Aldous, but you can read the whole thing right here and now. Look below for the full version of the "10 Minutes With..." article appearing in our latest issue of Marketing News.

Even the Nonprofit Marketer of 2008 isn’t immune to the recession.
Jay Aldous, chief marketing and communications officer for the U.S. Fund for UNICEF and the American Marketing Association’s 2008 Nonprofit Marketer of the Year award winner, is fighting off the economy’s effect on donations with high-profile campaigns such as The Tap Project, which enlists restaurants to offer tap water to diners for $1, with proceeds that then go to fund UNICEF’s global efforts to ensure clean water is available for impoverished children.
Aldous, who is also on the advisory board for the AMA’s 2009 Nonprofit Marketing Conference in Chicago and leading a panel there titled “Three Unique Case Studies: Doing More With Less,” recently shared his insights with Marketing News.

Q: Obviously spending and giving is down today. How is UNICEF being affected, and how is marketing responding?

A: Certainly it’s affecting us. The fundraising environment is more challenging. … We know that a large percentage of the donating public [is] reducing the number of organizations they support. A critical strategy for us is to make sure that we remain in consideration. … We are pleased that we are up 3% over last year in terms of donations.
Part of our success is the result of strategies and initiatives that we put in place several years ago that are now coming to fruition. In the past I think there had been perhaps too much focus or orientation on the wording of the importance of what we do and not enough focus on the benefits that we provide to those who support us. … On Monday we’d talk about HIV and AIDS; Tuesday, immunization; Thursday, education; Friday, maybe an emergency; Saturday, child protection; and by Sunday, donors were overwhelmed and confused about who we are and what we did, [they] essentially were indifferent. So now we speak to our single net impression. Every communication, every story, every donor interaction is going to be around saving kids’ lives, the desire to create a world where no child dies of preventable cause and we’ll speak to that topic with our brand values.
Donors are looking to be a part of something bigger than themselves and not just to support a specific project or program. That required a reorientation of our organization, [and for us to] look at how we build relationships and not [just] execute transactions. [We had to look at] how we communicate shared values and not deliver messages that try to leverage off of guilt. It has been a whole new way of speaking. And I think what that is doing in today’s environment is [establishing] an affinity and a relevance for our organization that is stronger than in the past.

Q: How has your marketing budget been impacted?

A: It has remained the same. Two things have happened. We’re being smarter and more disciplined in how we use our budget. The other thing is what I call an abundance of opportunities in the marketplace. We’re seeing agencies, media outlets and various vendors that are very hungry for business. We’ve been able to put together some programs and develop some relationships where we’re able to do a lot more for “X” than we have in the past. So in some ways, it’s a very exciting time.

Q: What specific examples from your integrated marketing have expressed your new orientation? UNICEF’s Tap Project, for instance, has garnered a great deal of attention for its concept and approach.

A: For us, what has been the learning and the power of the Tap Project is the potential that can be harnessed if you let people own and interpret something on their own terms, and that their investment and level of participation increases dramatically as a function of the empowerment and ownership that they might have. We have a volunteer program associated with it where we’ve got people doing videos on YouTube, hosting events that they’ve created or designed themselves. We’re saying: ‘Here’s what Tap is. How would you like to be a part of it? What does Tap look like and feel like for you? How do you want to manifest Tap in your life?’ And that is a very different approach from, historically, ‘This is how we want you to do it.’

Q: UNICEF has offices and marketing programs running around the world. How does marketing in general work for UNICEF?

A: We’re very decentralized. Having said that, we do have global brand guidelines that all country offices must adhere to, but with the guidelines we have a fair degree of autonomy and flexibility as to how we steward and mange the UNICEF brand. There are days when that is very empowering. We can create and develop and execute programs and campaigns such as Tap very quickly and very nimbly in the market without having to worry about the larger global organization or a bureaucratic approach. But at the same time there are opportunities missed. Sometimes it is difficult to have the level of consistency and clarity with the brand that we would like around the world.

Q: What advice do you have for nonprofit marketers fighting to retain and increase donations?

A: Here’s the upside: Many nonprofit organizations own and represent issues that are very important to the public, whether [they] be specific segments or even in larger audiences. So if you are an organization involved with animals, there is an opportunity to create content; several organizations are working with outlets to create animal-oriented programming. In our case there is something very compelling about creating a world where no child dies of preventable cause. There are a lot of things we can bring to the table.
The challenging environment we’re in is allowing us to focus on those opportunities where we have the highest return. We’re saying no to things that we need to say no to. We are focusing on and investing in those things that we know have bite and have a track record. In some ways we’re taking advantage of these times to clean house in terms of programs and priorities. I think all nonprofit marketers, and all marketers in general, should re-evaluate all the things that they are doing, and we need to ferociously focus on those most critical activities and efforts that we know will perform.

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For Marketing News' June 15th cover story "The Renaissance Marketer," we asked six marketing leaders to define the Renaissance marketer and how to become one.

The article delivers answers to five questions in the sources' words. Trouble is, there were too many great insights to fit to print.

Consider the following to be some "deleted scenes" from the story, or if you haven't read it yet, a little taste of what the feature has to offer. And be sure to check out our latest Marketing Power podcast episode, where we delve deeper into this topic with Eduardo Conrado and Jim Trebilcock, marketing leaders at Motorola and Dr. Pepper Snapple, respectively.

Q: How would you define a Renaissance marketer?

Jim Trebilcock, executive vice president of marketing, Dr. Pepper Snapple Group: A Renaissance marketer is someone that has a pretty good range of experience, but they are not approaching marketing in the same way [throughout] their 20 years in the business. They continue to learn and continue to evolve the way they approach it, and not that they have to be experts in every area, but they know how to get the right resources to be able to tap into new growth areas.

Q: What qualities do you think are necessary to be a great Renaissance marketer and why?

Jack Klues, managing director of Vivaki Communications: That individual has to have an inherent and insatiable curiosity about things, with not only how things work but how things are going to look, especially when you look out at the near term and longer term. … You don’t have to be an expert in content creation and messaging, or digital, or search, or CRM, but I think the Renaissance marketer has to have a core working knowledge of all those disciplines and a respect for all of them. … The other skill is someone who can actively listen and be prepared to respond to what’s going on around them. … If they are paying proper attention, they see gaps in consumer needs.

Q: Many marketers have progressed along the same track during their entire careers, but to be a Renaissance marketer, you need to know a little, or ideally a lot, about many avenues of marketing and business. So when and how does one jump the track? How and when did you do it?

Tony Weisman, president of Digitas Chicago: You need to jump around, and I think the earlier you start jumping around in your career, the better. … I think that was considered a negative years ago, now I think it’s considered a positive. … I would definitely get a grounding in media. I would definitely get a grounding in any enterprise that is about consumer listening and insight. … I spent the majority of my time at Leo Burnett working for two companies, McDonalds and General Motors, and those were totally integrated businesses. When I worked at McDonalds for eight years I sat with my client, side by side, for media promotions, retail, PR, African-American, Hispanic marketing. … I stumbled into this appreciation for these disciplines. I came away from that realizing that this was comfortable; this integrated, multi-discipline approach to businesses felt very right to me. … [For my career] it was finding a company and culture that fit and in each case try to learn new skills.

Q: What does the future hold for Renaissance marketers? Do you think we’ll be seeing more of them in the coming months and years, or do you think marketers will stick to a path and become specialists in one or two areas?

Mary Ann Mele, president, chief strategic officer and principal, R&R Partners Inc.: It has to be both. Not all of our brains are the same. You have to have people you and I might consider generalists, somebody who knows enough about each area but has the ability to put them together in effective combinations and is fairly effective in driving collaboration in people. And we have to have specialists. We have to. I would fail miserably if I didn’t have specialists, especially with technology moving the way its doing.

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The June 15th issue of Marketing News is on its way to readers this week, offering up articles on mobile SEO, emotional marketing and the AMA's upcoming nonprofit conference.

In the cover story, Staff Writer Piet Levy takes a look at the skills and attributes necessary to become a "Renaissance Marketer." And in the second feature story, I delve into hypertargeting: a targeting method by which marketers deliver customized, relevant messages to consumers based on not just demographics but behavioral and attitudinal data, hobbies, expressed interests, etc.

Through hypertargeting, marketers are striving to adhere to the age-old industry axiom: Deliver the right message to the right person at the right time. And marketers aren’t the only ones getting in on the hypertargeting game; a handful of news providers are trying their hand at it, too. Some news providers are experimenting with the tactic of serving up only those stories that consumers are interested in—publishing what readers want to read to attract more eyeballs and, ultimately, more advertisers.

In March, New York-based Time Inc. announced an experimental customized magazine that takes the RSS news feed model of news delivery into the print world. Dubbed mine, the personalized print magazine allows readers to select five titles from among Time, Sports Illustrated, Food & Wine, Real Simple, Money, In Style, Golf, and Travel + Leisure. Stories from each title are then pre-selected by editors, and there are 56 total resulting combinations. The first 31,000 readers that signed up received five issues over 10 weeks, and another 200,000 readers received a customized digital version online.

The customized magazine model in this case isn’t intended to attract more advertisers. Instead, it’s a bold ad experiment in and of itself. Toyota Motor Corp.’s Lexus came up with idea and serves as the magazine’s sole advertiser, according to several reports. And ads—all featuring the Lexus 2010 RX SUV—within the magazine and accompanying an online reader survey are, of course, customized to reflect readers’ data.

In April, another vaunted news organization dipped its toe into the hypertargeting space—but quickly found that reporters weren’t exactly ready for them to dive in. Editors at the Chicago Tribune found themselves in hot water with many of their reporters when they sent an e-mail to subscribers soliciting their opinions on descriptions of yet-to-be-published stories. As part of an ongoing research collaboration between the paper’s editorial and marketing departments, which previously asked subscribers and former subscribers about general news topics and older Tribune stories, the editors were seeking readers’ preferences regarding stories currently in the works.

E-mailed surveys were sent to approximately 9,000 readers at two different times, and each survey generated about 500 responses, according to the Tribune. “We’re not taking a marketing survey and adding up the numbers and saying, ‘OK, this goes on Page One,’” Tribune Editor Gerould Kern told the paper. “Research is an important tool in understanding consumer needs. … You can get compass directions on people’s interests and the trends. That becomes part of your broader understanding about your audience.”

News providers’ experimentation with hypertargeting is noteworthy to marketers because, while it’s important for both news organizations and marketers to serve up information that’s relevant to consumers’ needs, both groups’ educational and awareness functions musn’t be neglected, says Dave Morgan, CEO and director of New York-based Simulmedia. “I think the real opportunity in marketing is to tell consumers about things they might be interested in but don’t know about.”

Check out the June 15th issue of Marketing News to hear more on this topic from Morgan and other industry experts.

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