Integrated Marketing

Top Marketing and Advertising executives agree, integration is really, really hard.

Shelly Lazarus, Chairman/CEO Ogilvy & Mather. "

"You need open-minded people willing to come to the table and be respectful of other peoples ideas."

Steve Blamer, Worldwide CEO Foote Cone & Belding.

"You need one check for all the services. Compensate everyone for working well together (that) rewards everyone on the team based on delivering results."

Ed Eskandarian, Chairman/CEO Arnold Worldwide.

"The key issue is hiring people who want to work as a team and accept that teamwork is the right approach."

Tony Wright, Worldwide CEO Lowe Worldwide.

"You can't turn everyone into a 360 degree thinker."

Becky Saeger, CMO Charles Schwab & CO.

"In the end, you can not rely on the agency."

Wise words from the some of the wisest in the industry.

This is why it took us five years to perfect the unique blend of strategy, alchemy, creativity, expertise, process and technology to facilitate it for Mercedes-Benz. And then came Steve Blamer's compensation.

The reason I am referred to as a pioneer because not only did I make many of the rookie mistakes as we all did, but we persevered for longer than the usual two year stint it takes most people to burn out. We worked through the entire process, including compensation. Also the diversity of disciplines we worked with, 15 at one time, was greater than other examples.

It took five years, but Integrated Marketing at Mercedes-Benz USA works. And works well. Now that the best practices book is written on Mercedes and other Omnicom Clients, it need never take this long again. As long as the team leader has done it before and top management, like the CEOs above, are totally committed to the team approach.

Developing integration at Mercedes-Benz took an enormous effort, from the holding company mandate and critical investment in the technology, the lead agency faith and the closely knit senior integration team built up over a number of years of working together that made the impossible dream of collaborative creative development a reality.

Great creative leadership was also key. Everyone knew that not only advertising disciplines would lead the creative process. The best concept were always developed, regardless of origin.

Becky Saeger is right, while we as an Omnicom team took the early initiative and developed the team, the systems and technology, the team chemistry we had built up was most potent when the Client astutely structured for integrated marketing.

Ironically, while the CMO issued a mandate to integrate the efforts of all silos, it was one of her reports, an inspired general manager who actually had the wisdom, took the initiative and structured for integrated marketing.

Quotes taken from The Delaney Report 09/26/05

As we said in the 08/15/05 posting when the media wrongly reported Mercedes in decline, we wish they would get the facts right. Now again there are inaccurate reports of Mercedes "still sputtering" and unhappy with their agency.

One report's so called M-B source who "confirms" these rumors obviously does not read or understand the sales results which are anything but sputtering.

Mercedes-Benz sales in the USA are on track to achieve yet another record year. It's 12th in a row.

After admittedly lagging in the first quarter by about 5%, the company has put on a spectacular growth spurt. Sales at the end of September were even with last year, a record year, and are on pace to finish the year ahead of last year.

This confident forecast is because sales to September only included a trickle of the R Class which is in the sweet spot between large SUVs that are falling out of favor due to gas price concerns, (Sales down 43% vs last year) and sedans that lack the utility of a SUV.

In contrast the Mercedes-Benz M Class was up 25% versus a year ago.

Very competitively priced for a large sporty luxury touring car at under $50,000, the R Class stunned the buff press and this car is poised to fuel Mercedes sales for the last quarter and exceed last year, for another record.

Mercedes quality has also returned to it's rightful #1 position. I addition to significant improvements in IQS, (Initial Quality Study) each year since 2003,a recent quantitative study in Europe showed Mercedes back to it's dominant position versus BMW and Audi.

Harris Interactive conducted this new research to understand the values that adult consumers from Great Britain, France, Germany, Italy and Spain associate with 21 major automobile brands ahead of the firm's attendance at The 61st International Motor Show (IAA) Cars in Frankfurt, Germany.

As far as advertising goes, Mercedes has been the victim of multiple Marketing Vice presidents over the last five years. Certainly the last two and a half years have considerably constrained the Merkely+ Partners team which has always produced world Class work that has helped keep the sales streak alive for eleven consecutive years.

M+P would be the first to admit that the creative may have been off track, but Mercedes and the agency, spearheaded by new General Manager Marketing Communications and Mercedes veteran Scott Keogh, are well on the way through a major initiative to restore the creative to it's former distinctiveness before the personnel changes that disrupted it.

Mercedes'only problems, and not insignificant ones, are in Germany, mostly stemming from the unprofitable Smart division which took a $960 million charge in April this year. While part of Mercedes-Benz, Smart has nothing to do with cars sold in the USA. This coupled with the management turmoil that led to the early retirement of Jurgen Schremp has led to adverse publicity in Germany. The instatement of USA experienced Dieter Zetsche will help resolve this situation in the long term. Progress has already been seen, particularly on Smart.

But the USA sales performance is stellar and on track for another record, helped by the agency team that has been a part of the previous eleven records.

This does not look like sputtering to us.

Again, Laura Ries and I are in violent agreement in her article, Google is Sushi.

Her father and partner Al told me they only learn from people who disagree with them. This posting should generate a few people to disagree with me.

I wrote some time back that Microsoft's MSN is not a brand. The recent speculation that they are aligning with AOL is smart in my view, as baggage and all, aol is a brand. And a brand that can compete with the big people, Yahoo and Google, provided they change their business model and move forward from their "training wheels of the internet" image.

But aol, through parent Time Warner and powered by MSN is potentially in the sweet spot of the future of the internet, content.

But the recent restructuring does not indicate that they have the focus right for MSN yet. "MSN does not have a coherent strategy". AdAge 09/21/05 (You may not be moving fast enough, Steve).

For good up to date commentary on the battle of the search engines, read John Battle's Blog.

TechWeb News reported on 11/04, that Yahoo Inc. has hired another entertainment executive to help in its battle against Microsoft Corp., America Online Inc. and others in the highly competitive Internet-portal market.

Yahoo announced Lloyd Braun, former chairman of the ABC Entertainment Television Group, would lead their media and entertainment division.

"The combination of Lloyd's extensive business and deal-making experience, deep and long-standing relationships in the entertainment and media industries, and his proven creative instincts make him the ideal person to realize the full potential of Yahoo's media and entertainment offerings," Dan Rosensweig COO said in a statement. "With Lloyd's expertise, Yahoo is better positioned than ever before to work with creative partners to deliver exciting new content."

Yahoo's media and entertainment division includes its movies, TV, entertainment, music, games, finance, news and weather, sports, health and kids businesses.

Braun led the ABC television group for more than two years and was responsible for all creative, programming and business areas of the division, which included Touchstone Television and ABC Entertainment. Among the programs Braun initiated were "Alias," "The Bachelor" and "Extreme Makeover."

Competition in the Internet-portal market is intensifying as companies jockey to become the primary site for consumers looking for news, entertainment, music and products on the web. Along with Microsoft's MSN and AOL, a unit of Time Warner, Yahoo is also seeing more competition from giant search engine Google Inc.

Yahoo is starting to have the discussion which is enlightened, though they are not yet ready to see where they could dominate because they are still tracking the two-ton guerrilla that begins with G.

But as Laura observes, the big G is going the way the other big G went. General Motors lost it's way too. And prior to Lutz, the insular culture would not allow GM to see that it was obvious what they were doing wrong. Now that they are in the mortgage business, it is probably too late.

Now that Google is adopting the octopus strategy as Laura puts it, it may be the beginning of the end, despite a war chest that could buy Nigeria. Unless they look outside their to date successful culture, toward the future.

Like Boston Chicken which screwed up a phenomenal singleminded chicken success with the octopus notion, "why restrict ourselves to chicken?". They spent chapter 11 inducing money trying to re-brand as Boston Market. They eliminated their point of difference and business raison d'etre and succeeded in getting their business down to manageable proportions.

Boston Chicken, now Boston Market, grew very fast, going national and moving its headquarters from it's birthplace in Boston to Chicago and Colorado as it expanded. It went public in 1993 and briefly became a Wall Street phenomenon, when its stock rocketed from the initial offering price of $10 to as high as $40.
But on Oct. 5 1998 the parent filed for Chapter 11 bankruptcy.

It is now owned by the knowledgeable quick food operator, MacDonald's corporation.

Google needs to listen to the same people who predicted this stuff for GM and Boston Chicken.

It seems so obvious to those of us who work with brands everyday.

But people who have seen their capitalized value shoot by the establishment and stock go from an issue price of $85.00 to $295.00 in less than a year at last count can not be wrong. Or can they? We will see whether Google can find some way to balance their growth by reducing the arrogance factor and consulting with experts who do know a thing or two about branding and brand elasticity.

This places Yahoo in the best position in our opinion, if only they would seize the opportunity.

Google is an Octopus.

Microsoft and aol are going to be preoccupied with whose in charge and who is on first for a while. Especially if they have a co-ownership joint management deal, again.

Before they figure it out, which they will eventually, Yahoo can steal a march and dominate the new internet. Not another Al Gore version or one of George Bush's internets, but a true entertainment medium offering the best content in the most efficient way.

Yahoos biggest competition is going to be Cable TV and then the networks themselves. they should be very afraid. Yahoo should be very brave, and provide Mr. Braun a very wide mandate.

Cable and Network TV customers are totally frustrated with existing content delivery options.

CBS, after significant success with sitcom's like Friends & Seinfeld are flailing around copying Fox with reality TV and being scooped by HBO on home grown shows. The other networks are not much better.

Cable's movies-on-demand does not work properly. The model is broken and may be leapfrogged before it is fixed.

Alternatives offer Byzantine technology. If I told you we would offer music by mail @99 cents would you buy it? So why does Netflicks work in the US mail?

Netflicks works simply because others don't. Netflicks success is only a measure of others inefficiency and this inefficiency is an opportunity for new competitors like Yahoo who have not yet begun to capitalize on the paralysis of the entertainment delivery environment.

Look at Blockbuster, the most confused of them all. They are now copying Netflicks, the very competition ridiculed by Wayne Huizenga as he went through his arrogant streak after building a miracle from trash.

The cable companies are charging a fortune for content. Customers can not afford it. The full gamut now runs in excess of $300 per month. Don't believe it? Get a quote on all channels and all on demand services including Internet, excluding phone. This is not endearing customers.

Satellite companies have resorted to paying so called entrepreneurs to give away dishes. Is this s great business model?

Speaking of phones, if you have a cable phone, pray they don't cut you off when there is "trouble in the area" or you don't pay your bill by yesterday.

Internet users are frustrated with the whole Search Engine syndrome where the "targeting" is as blunt a media instrument we have seen, patently transparent to customers and at least as annoying as pop up advertising. Try Exactseek for a particularly vivid example of badness.

This is also starting to erode even trusted brands like Ebay and Amazon who seem to be temporarily blinded and have definitely lost their cutting edge position.

This is a brilliant background for Yahoo to light a beacon for customers and offer them unfettered entertainment content. A real alternative to cable for a start and a real competitor to the other long term survivor brand, aol, powered by Microsoft.

"Are You Connecting?"

Tim Dorgan poses this question in his interesting commentary on the Reveries survey, the second I have seen from this fine group on the subject.

Tim goes on to say "You know there's a problem when 90 percent of marketers think the ability to implement "total touchpoint" marketing is at least somewhat important, but only 52 percent think their companies are any good at it.

Not only that, but just 20 percent of respondents to (the most recent) Reveries.com survey of 198 marketers say their companies are able to implement effective "total touchpoint" marketing right now. To top it all off, only 12 percent said their media planning "always" fully integrates messaging to reach consumers as they travel from couch to car to checkout.

Why is there such a huge disconnect between perfection and reality when it comes to "total touchpoint" marketing? More important, what can be done about it?"

To respond to his question, Tim goes on to agree with many of the comments I have been making about the silos and the need for a new structure and of course senior management buy in and consistent support for Integration to really have a chance.

The reason that Mercedes-Benz USA was able to seamlessly introduce Marketing Integration when a new CMO showed up in March of 2003 was because a lot of homework had been done.

The first initiative, in 1999 was John Wren promising the then CEO Michael Jackson that the 4 marketing services companies owned by Omnicom would be seamlessly joined by technology.

To make this happen, we worked for two years with The Marketing Technology Group (MTG), a Rapp Collins Worldwide company based in Dallas Texas.

I rejoined Omnicom after starting an agency with John Wren's support 20 years ago to resolve an automotive conflict with Honda when Omnicom was originally formed.

One day after joining I viewed a demo by MTG and knew this would achieve John's objective. However implementing it would prove more challenging.

With strong financial support from Dale Adams, now President of Diversified Agency Services which controls about 200 of the marketing services companies owned by Omnicom and physical resources from CTO Jason Cohen, we worked with Arthur Anderson consulting (Accenture) to design build and implement MIT, the "Mercedes Integration Tool" with the original 4 companies supplying Advertising, Collateral Design, Direct Marketing/CRM and Internet Marketing Services.

This essentially internal tool was expanded from an asset management tool to include a Client research repository in 2002, using the upgraded Worksphere Product.

Michael Jackson was long gone by then, now CEO of AutoNation. So there was little support at MBUSA as 4 CMOs followed Joe Eberhardt, now CMO at Daimler Chrysler.

In anticipation that we at Omnicom would drive the integration Process or be very prepared for a CMO that would mandate it, in January 2003 I was appointed full time Director of Integration. A month later we held our first joint offsite meeting with MBUSA that comprised all the Marketing departments. They all agreed that Integration was now an imperative and that we would adopt a collaborative work environment powered by Worksphere that would also accommodate our expanded disciplines.

Two months later a new CMO arrived with a strong integrated marketing mandate. All the years of solid anticipation and investment put us in the enviable position of being able to respond in 24 hours and begin the era of achieving seamless Mercedes-Benz integration.

Everything was not smooth of course, but we had the tools and in the main, the collaborative environment essential to success.

Our biggest challenge was the degree of centralization the CMO mandated that virtually eliminated the individual relationships with now nearly 15 marketing services companies. Not a morale booster for their CEOs.

But the creative teams responded extremely well which enabled us to collaborate at the creative concept development stage on a single timetable, absolutely key to truly integrated campaigns. This avoids the trap which Jim Breene talks about elsewhere, where Clients and creatives think integration is a similar tagline.

Importantly, the Client announced a structural change that created an integration executive at MBUSA. While this remains a challenging situation, it was clear to any detractors that Integration was here to stay at MBUSA.

We produced increasingly better and better creative work and did it with improved efficiency. Our campaigns proved themselves in the field, with dealers and according to quantitative research positively impacted the brand Mercedes at a time when the icon was under attack from the media.
Stuttgart awarded the SLK350 launch the Silver Star award for the best integrated campaign in the world. Sales continued ( and still continue) at a record pace, despite increasingly competitive lease and incentive deals.

Integration, while never perfect, is now a way of life at Mercedes-Benz. This lengthy entry is the short version of the last 5 years.

For those marketers who have yet to take the plunge, take heed that this is not an overnight task. Maybe that is why Jim found out that while 75% of Marketers think they should seriously integrate their marketing efforts, the Pareto principle applies to the percentage who do it, only about 20%.

For marketers who are serious, make sure you hire someone who has actually done it and then ensure they have a complete mandate. Expect pushback. Never compromise.

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The BMW wheel keeps turning. Now Kerri Martin, ex-marketing communication manager at BMW's Mini group arrives at VW and persuades Crispin Porter to resign her old business and take on VW.(Click the headline to see the Adage story)

The only one probably amused by this is Pat Fallon. His agency and Crispin Porter were doing some of the best automotive work and the Arnold work for VW was some of the most consistent, distinctive and best integrated work in the industry.

Now all three are changing hands and at the same time. This is about as crazy as it gets.

I wonder what Tom Purvis, CEO of BMW thinks? Would he rather have gone to Crispin with BMW and reviewed Mini? (They could have swapped BMW for Mini between Fallon and Crispin). But now they are down two great agencies having fired one and annoyed the other.

Was this an attempt by Crispin to get even because BMW would not consider them for the BMW mainstream business after they had done such great work for Mini?

Was it really as we are asked to believe, that Crispin wanted to move on in experience? Been there done that with Mini?

Mini was a fringe brand. Nostalgic and eccentric. Like the VW New Beetle. Kerri is right, Crispin understand the pop culture. They did a great job which was admired by all in the auto and advertising industry.

But VW plays in the major leagues, or at least is trying to. They have had enormous product reliability problems that have held back sales. Profit pressure in Germany has not helped their US efforts to introduce a $75,000 Volkswagen and gain respect as a luxury brand that competes with the Mercedes S Class and BMW 7 Series.

It will be very interesting to see what Crispin are allowed to do on VW. It's not their father's Beetle.