2005 ANA Annual Conference News Blog

Google CEO Eric Schmidt

Google CEO Eric Schmidt addressed attendees on Saturday, sharing his 'aha' moment: he realized that "ads do have value if you could figure out the right ones to show.  Google gives advertisements to users at the right time, and in the right place."

He pointed out that only 1,000,000,000 people are currently using the internet, and that we are not even close to mass. 5,000,000 terrabytes of information exist in the world, only 2-3% of which are currently indexed and searchable, according to Schmidt.  His timing for when all of the world's information will be searchable? 300 years. 

Schmidt gave an example of an unsuccesful Google ad: The Atlanta Skydiving Center, whose tagline was "Only one death this year."  Not one person clicked on the ad, which while it seems like a failure was no loss for the advertiser.  In Google's model of pay per click, their ad was free.

He acknowledged that the power is moving from the advertiser to the end user.  While advertisers thought that they make the decisions, Schmidt called the world "inverted," noting that they (users) truly decide.  The evolution of advertising at Google was described by Schmidt as "inexpensively luxurious." 

Schmidt said that if anyone is starting a business today, in order to market it correctly you should first use Google, then Yahoo!, and then go to the sales structure.  "Cost per revenue dollar is so much lower than any other way you can spend your money."

He asked the crowd to imagine a world where bandwidth is free, and storage is infinite.  What would the world look like?  Would speed be instantaneous, as users ultimately want?  If you could store 100%, and if you opted in of course, Google would be able to deliver you all of the info you need at the right time. 

"If my rental car knows who I am, why can't we program the radio to give me the ads that I want? If I have to listen to ads on the radio, they might as well be the ones that I want to listen to," he said.

During the Q&A portion of his presentation, Schmidt acknowledged that not everyone agrees that all information being searchable is good.  He admitted that he feels that technology itelf is neutral, and can be applied for either good or evil.  He let the crowd know that Google as a company does believe in and respect copyright laws, and they don't agree that everything should be copied. 

The question was posed, "Will people ever have the option to see no ads on the net?"  Schmidt thinks the answer is almost certainly no.  However, if you switch the question around to "Will there ever be parts of the internet that are ad-free," then the answer is yes.  We will merely have a different way to pay for it.

Marketing ROI: Uncommon Partnership

The Wachovia tag team of CMO Jim Garrity and his analytics counterpart, Bob DeAngelis, spoke on their journey towards marketing accountability. This sixteen month ongoing process has aligned the country's fourth largest financial company with accountability:

The partnership between three disciplines consisting of marketing, analysis and finance.

• Due to merger with First Union, need to develop a Fortune 100 brand from scratch as name chosen was Wachovia over the larger company First Union.

• Brand promise: Uncommon wisdom for shared success. 

• Every expression defines the Wachovia brand--intense focus on marketing integration helps educate employees on what the brand is and how it effects them.

• How will we measure the impact of our marketing investment? A challenge from the Wachovia CEO to the three disciplines of marketing, finance and analytics.

The marketing/finance journey:

• Wachovia in 2000- Decentralized marketing budgets across lines of business.

• Wachovia in 2002- Commitment to ad spend. Centralized marketing budget and marketing spend governance. Establish controls and common language. Lines of business partnerships.

• Wachovia in 2005- Marketing Mix Modeling. Ad copy testing. Brand equity tracking. ROI.

The analytics journey:

• Wachovia in 2000-First generation data warehouse. Decentralized analytics function. Viewed marketing as an expense not investment.

• Wachovia in 2002- Central analysis and research functions. Customer behavioral data. Attitudinal Research data. Program specific analysis.

• Wachovia in 2005- Integrated attitudinal/behavioral data. Market mix modeling. Customer contact optimization

Marketing mix modelling continues to be a key focus with current testing in Florida involving tracked movement of dollars across several media. More to come...

eBay: Seven Challenges, Seven Solutions

"We no longer have a choice when it comes to marketing accountability. There is no other way to do business in the competitive world." This is how Kip Knight, VP, International Marketing, eBay opened his remarks at the Masters of Marketing on Saturday. Knight, representing a brand that started as an experiment ten years ago and now sells 50 million items daily, identified seven  challenges to marketing accountability and the subsequent solutions.

Seven challenges:

1. Unequal ROI Measures: the degree of accuracy varies greatly
2. Time Horizon: It is hard to measure different activities over time.
3. Changing Media Landscape: Among other things, network model faces uncertain future and internet marketing is constantly changing
4. Spending Mix: Ongoing debate on what ideal mix should be
5. Target Audience: Shotgun vs. rifle approach.
6. Marketing expertise: Loss of marketing generalists and training programs. Danger of "silo mentality" from various members of marketing team.
7. Management expectations: Tenures- CEO- 3 years, CMO- 2 years. Do the math.

Seven Solutions to Enhancing accountability:

1. Continual customer insights: Voices, visits and views. eBay takes a holistic approach to access granular data.
2. Measure what matters!
3. Stay brand focused- share best practices across business units and protect brand equity.
4. Commitment to training- eBay has a "marketing college" whose goal is to make marketers more accountable as well as the professors.
5. Build internal expertise- eBay has annual functional forums and senior management is vested to cross-functional/organization knowledge sharing.
6. Leverage global network- Work with non-competitors with areas of expertise that have something of value to exchange.
7. Manage management- Envision, educate, execute, evaluate.

Bob Greenberg's Piece of Advice to Marketers

"If you're tired of change, you better find a new field to work in, because it's just going to get exponentially more complex from here."

Joe Tripodi's Seven Deadly Sins of CMOs

Joe Tripodi, Senior Vice President and CMO of Allstate Insurance Company, imparted on attendees the major shifts that have occured at his organization recently.  They have taken to creating brand advocates, in his self-described "Superman-like" industry: Clark Kent is nothing special, but look deeper and the Superman character is in there. 

Allstate has taken on a new image in the insurance arena.  They are cultivating their brand advocates, by improving the Allstate customer experience, and creating an emotional bond with the public   They have expanded their consumer touchpoints using such tactics as putting their "Good Hands" logo on field goal nets at college football games, and are focusing on unique local needs in markets.  They have broken out of their cultural comfort zone with their sponsorship of NASCAR and the Fraud Files of the hit show "24."  Allstate has made customer-centric innovations as well as created an improved customer experience, all resulting in a holistic re-staging of the brand.

Tripodi then told the crowd of his "Seven Deadly Sins of CMOs," which were: 

• Working with vendors, not partners
• Getting devoured by the bureaucracy dragon
• Waiting for perfection
• Working on an island
• Getting caught in the headlights
• Chasing the "Holy Grail"
• Believing your own BS

Jerri Talks Tech Future

The Senior Vice President, Brand Management & Marketing Communications spoke Friday about technology and Verizon's place on the futuristic landscape. Using a cascade of visual stimulants representing Verizon's great creative, DeVard highlighted how innovation was driving marketing and where wireless technology, nontraditional media, VoIP and all the other buzz technology components were heading. Verizon knows that the uncertain ad supported future is both a threat and an opportunity particularly for a brand that closely follows the trends about how consumers access information and entertainment. In short, DeVard said "the future belongs to those brands who are best able to satisfy instant gratification."

Verizon takes a granular look into the future 5-10 years from now and has made an enormous investment into what they perceive the transformational changes are going to be. The holy grail: "What will the media device of the future be?" How will multi-tasking, where teens engage in an average of 4.3 platforms at a time, dictate the results. Verizon is hearing over and over again, people want "more, faster, better." They want to be there to provide "an ecosystem of user experiences" and create a rich multimedia experience. Verizon's advertising speaks to this with a clear message that focuses on richer lifestyle benefits versus technology's benefits. Some of the tactics Version is using to carry this message are video on demand sponsorship, Tivo showcases, blogs, podcasts and more. DeVard insists they will continue to insert ads in to new technologies.

In concluding her presentation, DeVard gave a sneak peek into Verizon's play into the future of television and the Verizon Fios, consumer programmed on demand content that harnesses the speed and capacity of broadband. Verizon is betting that the future of broadband and the wireless/networked community is a way of "going beyond" to get in front of the customer of the future.

Jim Stengel: Innovation in Action

Jim Stengel, Global Marketing Officer of Procter & Gamble, took the stage today and unveiled new innovations that P&G will be able to create, as they acquire Gillette: a Pringles can/Duracell flashlight... a Mach3-Swiffer... CharAlarm, which alerts you when you are out of toilet tissue... and complete with Raisin the dog, his brief co-star today, a Braun curling iron for show dogs. 

On the more serious side, Stengel went on to explain just how well P&G is actually doing-- after assuring the crowd that P&G and Gillette are working together extremely well. 

In his business update, Stengel said that innovation continues to permeate the organization, as they also continue to find new approaches to marketing.  They have begun to focus on health, beauty and personal care brands, and are up to 17 billion dollar brands from 10, only years ago.  With Gillette's brands included, they will have 22.  In their top 10 countries, they have had 9% average volume growth for the past 3 fiscal years.  Volume is up for '04-'05 in 16 of their top 16 brands, 16 of their top 16 countries, and 8 out of 10 of their global retailers.

The mission of P&G Marketers, Stengel told the crowd, is to

• "Live our corporate purpose of 'Touching Lives and Improving Life' through their brands and through their marketing
• Have a greater and more personal understanding of the consumers we serve
• Lead the industry to better meet the needs of consumers, developing better measurement tools for ROI and new ways to market in more consumer-centric ways
• To be the best, most inspired, brand building marketing organization in the world."

He assured everyone in the room that they are living the mission.  With case studies like the launch of Secret Sparkle, Pampers brand reinvention, the launch of Biomat to the orthodox community in Israel, and the success of a dance craze brought on by Rejoice shampoo in the Phillipines, Stengel proved that they truly are.

ANA President and CEO Bob Liodice

Today's first general session began with President and CEO Bob Liodice addressing the crowd.  He mentioned the concerns that face the marketing industry- the lack of talent, creativity, resources and poor management along with others, and spoke about how the industry is guilty of pointing fingers at others.  He went on to say "the reality, however, is that the issues facing our industry are not solvable by any one party.  Not by marketers, not by agencies, not by consultants, not by researchers, and not by the media."

Liodice did tell the crowd of 900 marketers what he does see, however, that is a positive phenomenon that he believes will lead the industry to overcoming the challenges: Industry Collaboration and Convergence.  "No one company, no one organization, no one industry segment can afford to go it alone," he said.  "Individually we don't have the insights-- but collectively we do.  Individually we don't have the experiences, but collectively we do.  Individually we don't have the  resources, but collectively we do.  Individually we can't propel critical action steps, but collectively we can.  Individually we can't break down barriers, but collectively we will."

Liodice went on to highlight how the ANA itself already does, and will continually expand their role to do, just this-- to bring the marketing community together, pool our resources and create the answers we need. 

His framework for elevating the industry is set in five strategic arenas:

• Make Marketing Acceptable
• Make Marketing Effective
• Make Marketing Accountable
• Make Marketing Productive and Efficient
• Make Marketing A Socially Responsible Industry

Liodice closed by saying, "I am truly enthused that as the pathway for dialogue opens up, we will get our agendas better aligned and more focused to securing the progress we richly deserve."

Jim Stengel: Brandweek's Grand Marketer of the Year

The 2005 Association of National Advertisers Annual Conference, Masters of Marketing, began in full swing last night with Brandweek magazine's Marketer of the Year awards dinner. 

The prestigious Grand Marketer of the Year for 2005 is Jim Stengel, Global CMO, Procter & Gamble.  In 2005, Procter & Gamble boasts 22 billion-dollar brand names. With the purchase of Gillette, P&G added an array of men's grooming brands, which secured its place as the world's largest maker of consumer products.

Mike Rowe of the Discovery Channel's "Dirty Jobs" hosted the evening, and helped honor the following Marketers of the Year:

• Jed Connelly, SVP Sales and Marketing, and Jan Thompson, VP Marketing, Nissan: Despite rising fuel prices and rival-employee discounts, overall vehicle sales increased 14.8 percent, the largest gain of any automaker in the U.S.
• Mike Boylson, CMO, J.C. Penney: Adding designer lines by Nicole Miller, Bisou Bisou, Mixit, and Arizona, has changed J.C. Penney into a trendy retailer.
• Barry Sternlicht, Founder, Starwood Hotels and Resorts: By re-marketing the Westin Heavenly Bed, net income will increase 39 percent in 2005 to $484 million.
• Geoffrey Frost, CMO, Motorola: Thanks to a new deal with Apple's iTunes coupled with the innovative "Hello Moto" ads, Motorola has taken a 16.4 percent cell phone provider share worldwide.
• Anne Saunders, SVP Marketing, and Ken Lombard, SVP and President, Starbucks Entertainment: By releasing highly- anticipated CD's by Ray Charles, Bob Dylan, and Alanis Morissette in locations, Starbucks is revolutionizing the method in which brand name music is sold.
• John Mackey, CEO, Whole Foods: Mackey has single-handedly legitimized the natural and organic food market, en route to a $3.9 billion empire.
• Scott Greenstein, President, Sirius Satellite Radio: In 2004, subscription base tripled, and net revenue hit $230 million. In January, Greenstein welcomes crown jewel, Howard Stern, to his satellite radio network.
• Dean Harris, CMO, Vonage: Sold one million Americans on Internet phone service, and made Vonage a household brand-name.
• Kevin Morefield, EVP Strategic Planning, and Brian Woods, CMO, Ameriquest: By sponsoring The Rolling Stones, Major League Baseball, the NFL, and other family venues, Ameriquest's net earnings for 2005 will reach $30 billion.