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Thursday, October 28, 2010

Marketer of the Year: Ford Motor Co.

Carmaker Steers Its Way Out of Crisis With Improved Products, Bottom-Up Creative Ideas, Once-in-a-Lifetime PR Boost


The Ford Team
 
NEW YORK (AdAge.com) -- It was arguably the darkest hour for American automakers: Struggling with the collapse of the global economy, the U.S. government in 2008 bailed out General Motors Co. and Chrysler Group with generous loans that incited rancor and debate across the country. Not so with Ford.
It seemed rather a risk for the iconic marketer to turn down the Troubled Asset Relief Program; it wasn't as though the brand that Henry built wasn't in trouble like its Detroit counterparts -- it lost $14.6 billion in 2008. But turning down the funds turned out to be a sage move.

When asked just how much declining TARP funds was worth, Ford marketing chief Jim Farley doesn't hesitate: "I think it was worth more than $1 billion of coverage and customer interest," he said. "If I had to go out and advertise, it would be that kind of bill in paid media. It's a once-in-a-lifetime thing."

Most top marketing officers would kill for $1 billion in free goodwill. But for Mr. Farley, that was just the beginning of a long road that helped the grand dame of automakers survive the Great Recession -- with a little bit of luck, a little bit of timing and a little bit of chutzpah. Ford is now firmly entrenched back in the No. 2 spot for U.S. sales among automakers, with 17% of the U.S. auto and light-truck market in the first nine months of 2010, behind GM, according to Automotive News, an Ad Age sibling. 

The company's products are better than ever, promoted and marketed by a revamped strategy headed by Mr. Farley. U.S. yearly sales are up 17% through August, which is more than double the industry-wide gain of 8.4%. Ford's $4.7 billion profit in the first six months of this year is the company's largest since 1998.

Meanwhile, Ford's ability to secure the commercial loans that helped it avoid a government bailout has led to huge perception gains. An Oct. 1 Rasmussen Reports survey, for example, found 55% of survey respondents said they are more likely to buy a Ford because the company did not take TARP funds, a stunning figure nearly 18 months after the fact.

"This is a scrappy team, a surviving team," Mr. Farley, 48, said of the marketing group that he took over in 2007. "When they got some crazy new leader, they stayed with him."

Back in 2007, when CEO Alan Mulally was trying to recruit Jim Farley from Toyota, where he had led marketing for the luxury brand Lexus, they met in Dearborn, Mich., and Mr. Farley was impressed with the plan the new CEO had in mind.

"He pulled out a document and there were, like, 200 individual models on it. But he said to me, 'You see this blue oval? We are going to focus on Ford, and take Ford and integrate it globally,'" Mr. Farley said of his meeting with Mr. Mulally. "As a competitor, I was always scared that Ford was going to do that."

But the bigger concern was a cultural one. Mr. Farley, a self-described "freak," was worried he wouldn't fit in at Ford.
"By 'freak,' I mean that I like bottom-up ideas, creative thinking at the client, not the agency. I expect our team to come up with new ideas and I expect that to flow up from the bottom. I was worried the culture would reject me like a bad organ," Mr. Farley said. "Alan just said, 'Jim, we'll stand back to back. Like Wyatt Earp.'"

Instead of wondering whether he would fit in with the culture of Ford, Mr. Farley changed the culture.
"Some people here thought we should talk about technology or history -- 'We need to talk about Henry Ford!' -- instead of telling the consumer how good the product is," he said. So Ford reprised its "Swap Your Ride" campaign, where it has Honda and Toyota owners test drive Fords, and used the testimonials in its advertising. It launched the 2011 Explorer crossover on Facebook and created a campaign called the Fiesta Movement, which loaned out the small car to young social-media-savvy bloggers across the country to let them seed and spread the word long before the car was set to launch in the U.S.

"Jim Farley has done a superb job," said longtime automotive advertising and marketing executive Peter DeLorenzo, who now runs AutoExtremist.com. "When he came to Ford, he came at the perfect time. The company was already focused on a new course thanks to Alan. Farley took all the constituents of marketing and got them on the same page. He took some risks with the advertising, and Ford's products are getting better by the month. It worked out. The marketing and advertising has all come together nicely."

Among the bigger risks? A truck campaign for the F-150, which went against everything one is used to seeing in an ad for a pickup truck, Mr. DeLorenzo said. "It's witty, it's well written, and it makes tremendous use of Denis Leary's voice-over. It's almost cerebral in a way." 


 
Ford actually cut U.S. ad spending in 2009 as it consolidated its focus on the Ford and Lincoln brands, though it raised network TV, print and internet spending, according to Ad Age DataCenter. U.S. measured media spending for the first half of 2010 was $530.2 million, up 10.9% from $478.2 million spent in the same period of 2009, according to Kantar Media.
It also merged advertising and public relations; gone is the church-and-state separation. "We're now praying together," said Mr. Farley.

Its commercials, featuring everyman Mike Rowe, the host of Discovery Channel's "Dirty Jobs," are a hit and it tapped social media to launch the Fiesta in China -- a move that inspired the U.S.'s Fiesta Movement.

"Other than Facebook, China has the largest social-media sites in the world," Mr. Farley said. "So we imported 100 Fiestas and started a campaign that asked people to take a picture of themselves with the Fiesta if they saw it on a street, and spread it around."

Some of those same practices will be adopted globally and domestically when Ford launches the next-generation Focus.

Meanwhile, Ford's ad agency, Team Detroit, a consortium of five WPP shops, has its roots in JWT's first efforts for Ford a century ago. And at a time when the single-holding-company model is often knocked in the ad industry, Mr. Farley and Team Detroit Chief Creative Director Toby Barlow enhanced a model Mr. Farley developed at Toyota called Train, in which the agency taps the best talent it can find -- even if it means dipping outside of WPP.

"Toby is the coach of a fantasy league and he gets to pick the dream team every time we have a project," Mr. Farley said. "It allows us to have a freshness in the agency-client relationship over and over again."

Mr. Farley said it could be as diverse as bringing in a creative who worked on a Harley-Davidson motorcycle campaign to work on a Ford F-150 truck assignment, or hiring an artist who does country-western CD art to work on a brochure.
"It hasn't been perfect," said George Peterson, president of the automotive research firm AutoPacific, citing Lincoln. "The Lincoln launches, even though they threw a lot of money around, it still doesn't seem to have resonated yet with people around the country. There are examples of launch-and-leaves out there where Ford just cannot keep enough weight on a product." For instance, Ford Flex was launched in the first week of the recession and isn't nearly up to the level of the other models.

Still, Mr. Peterson, a Ford owner himself, said he likes what he sees.

"One, they have focused their marketing message," he said. "Two, they are not only marketing to prospective customers, but to their present customers as well. I receive plenty of direct mail and emails from Ford. Three, their outreach has never been better. They're probably doing more television than anybody expected, especially with the Mustang and the Fiesta."

Ford is also an industry leader in onboard technology with its SYNC in-car communications and entertainment system, co-developed with Microsoft. Mr. Farley called mobile marketing the most underrated technology right now.
"People are spending hours on their devices with all this cool data and content, and we're not part of the conversation," he said. "There hasn't been this kind of moment in modern marketing since TV in the 1950s. We haven't seen such a quick flip of media consumption like that, and we as marketers haven't caught up. The smart companies, like General Mills, are going to application people and making it work."

Mr. Farley said he envisions a day where something like SYNC "becomes a revenue platform. Not only for us, but for companies that develop applications. Five to 10 years, tops. Who would have believed we'd be talking about us, a car company, being a leader in that technology?"

Mr. Farley pauses for a moment.
"Can you imagine?" he says. "My grandfather was an employee of this company [he owned a Ford dealership]. I love the brand, I love the products. This is for the marketing and PR team at Ford who all responded to a crisis in a way that no one could predict. The fact that we're sitting here talking about [this] is the coolest thing I could ever think of."

Marketer of the Year: The first 40 years

Ad Age began its annual marketer award in 1971. Over the past 40 years, five companies have been multiple winners: Apple, Coca-Cola, Disney, McDonald's and Procter & Gamble.

Year Marketer Business
Marketer of the Decade (2010) Apple Technology
2010 Ford Motor Co. Auto
2009 Hyundai Auto
2008 Team Obama Politics
2007 Nintendo of America Technology
2006 Toyota Motor Sales USA Auto
2005 Procter & Gamble Co. Consumer packaged goods
2004 McDonald's Corp. Restaurants
2003 Apple Technology
2002 JetBlue Airways Airline
2001 Pfizer Drugs
2000 Target Retail
Marketer of the Century (1999) Procter & Gamble Co. Consumer packaged goods
1999 Amazon.com Retail
1998 Volkswagen of America Auto
1997 Gap Inc. Retail
1996 Nike Apparel
1995 Walt Disney Co. Media/entertainment
1994 Microsoft Corp. Technology
1993 MCI Communications Corp.
(Bert C. Roberts Jr., chairman-CEO)
Telecom
1992 Ross Perot
(Presidential candidate)
Politics
1991 Wal-Mart Stores
(Sam Walton, founder)
Retail
1990 ConAgra
(Mike Harper, chairman-CEO)
Consumer packaged goods
1989 McDonald's Corp.
(Fred Turner, chairman (Adman of the Decade))
Restaurants
1988 Walt Disney Co.
(Michael Eisner, chairman-CEO)
Media/entertainment
1987 Procter & Gamble Co.
(John Smale, chairman-CEO)
Consumer packaged goods
1986 Coca-Cola Co.
(Roberto Goizueta, chairman-CEO)
Consumer packaged goods
1985 General Motors Corp.
(Roger Smith, chairman)
Auto
1984 Apple Computer
(John Sculley, president-CEO)
Technology
1983 Chrysler Corp.
(Lee Iacocca, chairman-CEO)
Auto
1982 Campbell Soup Co.
(R. Gordon McGovern, president-CEO)
Consumer packaged goods
1981 Warner Communications
(Steven Ross, chairman-CEO)
Media/entertainment
1980 Ronald Reagan presidential campaign
(Richard Wirthlin, chief strategist)
Politics
1979 Burger King Corp.
(Donald Smith, president)
Restaurants
1978 Paramount Pictures
(Barry Diller, chairman)
Media/entertainment
1977 Miller Brewing Co.
(John Murphy, president)
Consumer packaged goods
1976 Kmart Corp.
(Robert Dewar, chairman)
Retail
1975 Mobil Oil
(Rawleigh Warner Jr., chairman)
Energy
1974 Coca-Cola USA
(Donald Keough, president)
Consumer packaged goods
1973 Delta Air Lines
(W.T. Beebe, chairman)
Airline
1972 American Motors Corp.
(Roy Chapin Jr., chairman)
Auto
1971 Norton Simon Inc.
(David Mahoney, chairman-president)
Conglomerate

P&G, Walmart Find Success as Moviemakers for Their Brands

With a Third Film Set to Air on NBC, Have Marketers Found Winning Formula for Branded Entertainment?

LOS ANGELES (AdAge.com) -- Earlier this year, Procter & Gamble and Walmart teamed with NBC for what is deemed by many to be the new model for marketer-funded entertainment: a series of prime-time family movies produced by P&G Productions. The films are designed to lure consumers to buy P&G products at Walmart using original family movies and exclusive ad buys. 

'The Jensen Project'

Just don't expect too many other brands to duplicate the model just yet -- not because they don't want to, but because only the biggest and mightiest right now have the resources to pull it off. 

The two made-for-TV movies, "Secrets of the Mountain" and "The Jensen Project," were moderate hits by prime-time standards -- "Secrets" was the highest-rated program during its Friday-night premiere in April and was watched by more than 7.5 million, while "Jensen" finished second in its time slot in July with more than 4 million viewers. But as case studies for successful branded entertainment, they've become the holy grail of how networks and marketers can use entertainment to achieve scalable audiences, measurable product sales and active fan communities. 

P&G, the world's biggest ad spender, and Walmart, the nation's largest retailer, first proved they could be arbiters of original entertainment in the late 1990s, when both companies were launch members of the Association of National Advertisers' Alliance for Family Entertainment. The initiative successfully lobbied to get family-friendly programs such as the WB's "Gilmore Girls" on air and identified families with children under the age of 18 as both the largest and most underserved potential viewing audience. Of those viewers, only 23% said at the time that they were satisfied with available family-entertainment options. 

"One of the things that struck me to move down this path was some quotes from moms who said, 'We expect companies to follow where they put their ads and put their ads in appropriate content,'" said Marc Pritchard, P&G's global marketing and brand-building officer. "We took that pretty seriously. We listen pretty carefully to moms when they talk." 

P&G has long been a leader in creating original content from its early days as the co-creator of some of the first radio soap operas in the 1930s on behalf of brands such as Oxydol to its creation of daytime soaps such as "Guiding Light" and "As the World Turns," each of which just recently ended their decades-long runs on TV and its launch sponsorship of The People's Choice Awards. Next year, the company will produce the first "interactive telenovela" for MTV with Ben Silverman's Electus

But what makes P&G and Walmart's partnership more than simply a spruced-up movie of the week is its impact on sales. 

Walmart devoted extensive front-of-store real estate to participating brands for each film -- including Tide, Downy, Pampers, Duracell, CoverGirl, Oral B, Swiffer, Pantene and Gillette -- to drive viewership for the telecasts. The DVDs, released the day after each film's premiere, were then featured prominently in Walmart's electronics section and became best-sellers, said Greg Warren, Walmart's VP-creative advertising -- no small feat, considering Walmart accounts for roughly 30% of DVD sales, according to NPD Group. 

P&G, which spent a reported $4.5 million alone on the production of "Secrets of the Mountain," also reported a measurable increase in product sales and market share from the program. In an April conference call, P&G said that favorability scores for brands advertised on film increased 26% among moms who saw it, and purchase-intent scores for moms who saw the movie were 2.7 times higher than for moms who didn't see it. 

Such a halo effect for both sponsors, as well as official broadcast partner NBC, might seem like other marketers would be scrambling to re-create P&G and Walmart's model. (Other marketers have long covered similar ground -- Hallmark and its "Hall of Fame" for example. But Hallmark worked without a retail partner on the scale of Walmart, and the films it produced now generally air on its own cable channel.) 

But Jim Hoffman, NBC Entertainment's senior VP-sales and marketing, cautioned that the model is not that simple.
"It raises a lot of questions from other clients about the kind of resources that are needed," he said. "It's an enormous undertaking that needs a tremendous amount of resources, and not everybody has those capabilities. What's really innovative is how they're working together. It's almost like their commercial pods are very much part of the program." 

Indeed, P&G and Walmart's custom commercials, created by Martin Agency and featured exclusively throughout both films, are perhaps the most significant investment from the project. P&G also had extensive product placement in the first film (for both its own and Walmart's Great Value house brand) and dabbled with some in the second -- the marketer's Pur water filter was featured in a storyline integration in "The Jensen Project." 

'Secrets of the Mountain'
 
Walmart and P&G spent a collective $2.7 million on measured air time during "Secrets of the Mountain," and more than doubled their investment for "The Jensen Project," for which they spent a combined $4.93 million on ad buys, according to Kantar Media. Spot buys for the later ran as high as $221,000 -- comparable to a top-tier broadcast drama such as ABC's "Desperate Housewives" or a Fox comedy like "Family Guy." 

While the movies may not be the most beloved by critics (The New York Times wrote in July: "'The Jensen Project' may be friendly to family values, but it gives the cold shoulder to fun."), but they have been well-received among their core audience. The films were at least decent enough to pique the interest of four-time Academy Award nominee Ed Harris ("The Truman Show"), who stars in "Touching Home," an independent family film that he recently pitched to P&G and Walmart for potential distribution. 

As the companies prepare a third film, "A Walk in My Shoes," for a premiere on NBC later this fall, Mr. Warren said the companies remain aligned in their common pursuit of underserved consumers.
"We've been very collaborative -- it's not like one person passes duties to the Procter folks. We're all around the room in our video conferences making comments. It's much easier to have these conversations when you're so clear on the end goal," Mr. Warren said.