Posts Tagged ‘Sustainability’

Takeaways from Sustainable Brands Conf #SB10

Thursday, June 17th, 2010

It’s officially conference season for marketers around the world and I’ve been doing my share to spread the good word of Marketing with Meaning on this variation of the campaign trail. Two weeks ago I got a chance to speak at the Cause Marketing Forum in Chicago, next week is our huge seminar at the Cannes Lions Ad Fest (where I’ll be blogging and tweeting all week), and last week I got a chance to take the stage at the Sustainable Brands event in Monterey, California.

Sustainable Brands is one of the largest and longest-running events dedicated to the topics of sustainability and corporate responsibility, and how they come to life in marketing for some of the biggest brands in the world. I had the chance to meet executives from companies such as Microsoft, Unilever, and Walmart. Some of the delegates hold specialized roles in their companies, while others were traditional brand marketers at companies that have mainlined sustainable business and marketing practices. I felt a little like the wild card participant at the event. I didn’t share a case study on sustainability or have an agency devoted to this surging specialty practice. Instead I got to come in and share how the interruptive model of marketing is no longer sustainable, but that Marketing with Meaning offers a new path—a path in which brands can reach incredible results both in building the business and improving the world. You can see the slides from my brief presentation below…

Interestingly, I got one piece of negative feedback from an audience member in a roundabout way that I would rather not describe here. Someone in the audience from a different advertising agency complained through certain channels that I was far too strong in my comparison of interruptive advertising to pollution, and that I might have embarrassed this person’s clients. This was a new first for me, as I’ve been tougher on our profession before (I always say “our” or “we” because I live in this industry, too) with many more advertising folks in the room, and never gotten this response. Sadly, I offered to discuss this concern directly with the person but I’ve yet to hear a response. What do you think? Was I too tough?

Moving on, I only got to attend one of the four days that the conference ran last week, but I did manage to capture some killer content for you, dear readers. There were three terrific presentations from marketers that had me giving my new TweetDeck iPad app a rigorous workout:

Timberland

Mike Harrison, Chief Brand Officer for Timberland, took the stage to share the story of the company’s resurgence behind its new Earthkeepers boots. A fellow Procter & Gamble alum, Harrison kicked off his presentation by saying that his years in traditional marketing at P&G did not prepare him for this new world of developing and marketing sustainable products. He went on to admit that the company is still figuring out the right path in this new space; but after listening to Mike on stage and in a Q&A session later in the day I believe Timberland just might be writing the missing manual for success.

Timberland itself is a company that is focused on delivering “commerce and justice” in everything it does; its positioning is “the authentic, sustainable outdoor brand,” and as a brand that is about enjoying and exploring the outdoors it has a built-in link to environmental sustainability. Last year the brand created a Facebook application that led the company to plant more than 1 million trees. The company has created a kind of “nutritional label” for its shoe boxes that shows what goes into them, and it has pledged to improve the sustainable sourcing of its products every year. And this also follows through the company’s organizational culture: For years, employees are encouraged to take a week of additional paid time away from the office to volunteer on causes they value.

This starting point helped the brand recognize the opportunity to create an Earthkeepers boot that uses recyclable materials and works with suppliers to minimize the environmental impact of activities such as leather tanning. The end product is something that looks good or better than other boots. (Well-used, recycled leather always looks better.) And the company is working on an Earthkeepers Boot 2.0 that can actually be sent back to the company for repair and recycling.

The idea works strategically because it is helping the company differentiate in a very crowded marketplace. As Harrison said, “Anyone with a fax machine and a friend in China can make a boot.” Results have been very strong so far: It should soon be a $400 million line and is helping the brand improve on key equity measures. Harrison showed how the stock price is up 50% since the company repositioned itself away from hip-hop and back toward the environment. Interestingly, a vast majority of sales of the boot are from outside the U.S., so this growth should only continue as the brand prepares to expand the line and its marketing budget. Expect more big things from this brand in the year ahead!

IBM

I was excited to see Lee Green from IBM at the conference because we will have his colleague, John Kennedy, join us at Cannes next week. Green is Vice President of Corporate Marketing at IBM, and he shared the story of the company’s move to make “A Smarter Planet.” Like Timberland and many of the best case studies, IBM’s new path came from years of slowing sales and growing competitive pressure. The company needed to be about something more than hardware or consulting services; it desperately needed a new focus and positioning on something higher-level.

IBM went to its roots and rediscovered its history of creating products that drive progress. It realized, however, that “progress” is not about the technology itself, but rather about how technology can be used to improve the world. IBM realized that “the planet is getting flatter… and smarter”—and it had an opportunity to make a Smarter Planet. This new direction is leading the company into some pretty interesting new businesses. For example, it is helping companies re-fit aging buildings to meet the latest green guidelines. It is working on a tool to allow people to see the energy they are using, which results in 15% less usage and a 10% cost savings.

Smarter Planet is more than a new ad campaign; this is really an entirely new positioning for the company—and it is delivering on the concept of Smarter Planet by doing more than running TV commercials. For example, it hosted an Eco-efficiency Jam earlier this year that brought together 1,600 business, government, and NGO leaders from more than 140 countries to work on some of these key problems together.

The results of this redirection are very preliminary but seem to be having an impact. IBM is growing again, and it was named as the second most valuable brand in the world in Interbrand’s annual survey, with a valuation of $60 billion.

Jack Daniels

We’ve recently begun doing some work the Brown-Forman, the parent company of Jack Daniels, so I was excited to meet and hear from Rob Kaplan, who leads Corporate Responsibility for the company. He shared the story of how Jack Daniels, arguably the number-one spirit brand in the world, is discovering the power of including sustainability in its marketing strategy. Like the two examples above, Jack Daniels did not have to invent or add a meaningful message—rather, it went back to its roots and what it has continued doing today. At its small distillery in Lynchburg, Tennessee, 99% of waste is reused. Used barrels are sold to others who reuse them, grain by-products are sold to local farmers who feed them to their animals, and the nearby streams are kept perfectly clean because it is this limestone-filtered water that gives Jack Daniels its smooth taste.

Kaplan spoke about how the company spoke with Sam’s Club, which was looking to feature brands that have true sustainability credentials. After hearing the story of the Jack Daniels recycling and reuse program, they asked for a very large order to feature on special nationwide. Now, those of you from the CPG world know that getting new distribution, on feature, at a chain such as Sam’s Club can basically make your number for the year. But instead of just putting some regular Jack bottles on a pallet and shipping them out, the brand took the opportunity to create a special SKU. This new, limited-edition bottle not only gave brand fans something unique, but Jack Daniels partnered with a nonprofit organization to plant 100,000 trees with proceeds from the sale of these special bottles.

Not only did this initiative help secure incremental sales at Sam’s Club, but it earned positive word of mouth from sustainable product fans. For example, this Sierra Club blog post glowingly wrote of the promotion.

Overall I came away from this conference convinced that “sustainability” is no longer just some kind of siloed corporate department or annual report box to check off. It is something that consumers are demanding of the products and services they buy every day, and it offers a strategic focus for brand marketing with meaning.

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Posted in Conferences, Sustainability | 3 Comments »

Recap of P&G Global Alumni Reunion

Wednesday, July 1st, 2009

One of the benefits of having worked at Procter & Gamble (I was in marketing for six years from 1997 to 2004) is access to an alumni club of thousands of the smartest business minds in the world. Every two years the P&G Alumni Network hosts a global summit that brings together top leaders from around the world, including a few of the top current leaders still at P&G. Two years ago the event in Cincinnati was outstanding, so long ago I made plans to attend this year’s event in Rome, which was held two weeks ago. I took the opportunity to take the family on a vacation through Italy, which means this post is a little delayed, but I wanted to share some highlights of the sessions from the event.

The theme of the sessions was “improving consumers’ lives long term—a sustainability challenge,” and I found much in common with the Marketing with Meaning idea that I write about weekly in this space. Below are a few of my notes, on a speaker-by-speaker basis:

Fernando Aguirre, CEO of Chiquita Brands International

Chiquita seems to be making very positive moves on the sustainability front, a big plus for a company that uses natural resources heavily and works mainly in developing nations with rain forests, where problems seem to be significant and global biodiversity is in the balance. Aguirre talked about how his company is making several moves to embrace sustainability. For example, it is testing a new cleaning and packing station process that reduces water use from 80,000 to 3,000 cubic meters of water, which, if moved throughout the company’s operations, could save 3.4 billion gallons of water per year.

He specifically shared the case study of Chiquita’s challenge in Europe a few years ago, when cheap imports from questionable companies threatened the company’s sales results. Chiquita chose to highlight its sustainable harvesting practices and secured an endorsement from The Rainbow Alliance. Marketing highlighted Chiquita’s efforts and the Rainbow Alliance’s support, and as a result sales actually increased despite the huge price pressure. In other words, Chiquita’s sustainability positioning helped it differentiate a commodity and retain premium pricing. Because of these practices, Chiquita is now attracting “green” investors. Not a bad value equation case study.

Toni Belloni, Group Managing Director, LVMH

LVMH is one of the world’s most impressive houses of brands. The company is a luxury machine, with more than 60 brands ranging in sales from more than $5 billion to less than $5 million. Belloni oversees the company, but it is a very independent group of brands. He talked candidly about how this makes it difficult to drive a corporate sustainability movement. Another challenge is the fact that his luxury brands often work with very small “mom and pop” craftsmen, so it is hard to force them to live up to sustainability standards.

Nevertheless, the company is making a lot of progress. One example is a much-improved volume forecasting process and model that is helping shift shipping from airplanes to sea transport. The big downside of sea transport is that it can take many weeks longer to move goods. But better volume forecasting and planning can make a big difference. Shipping not only reduces transport costs by 90%, but it also cuts emissions by 80%.

I was very interested to hear that LVMH as a company is focused on the cause of supporting arts and culture around the world. In what is a perfect fit for the luxury brands and their consumer targets, it sponsors more than 30 art exhibitions every year, and created a “Haute Couture Academy” to encourage interest in the field and develop future hires.

Stef Kranendijk, CEO, Desso Group

The Desso Group is one of the world’s largest makers of carpets. A few years ago Kranendijk read the book Cradle to Cradle, a manifesto meant to convince companies that they can improve the world and improve their business results by pursuing more sustainable manufacturing processes. Stef decided to remake his company according to the manifesto, and he spoke about how his company is recycling carpet, using fewer chemicals, and innovating in areas such as office noise reduction. I gave him an advance copy of my book and I hope that he now reinvents his marketing according to my manifesto!

Len Sauers, VP, Global Sustainability, P&G

Sauers was one of the notable attendees who is not yet an alum of Procter. He was a perfect fit to speak in the conference theme of sustainability. He first spoke about P&G research into what consumers are willing to pay for more sustainable products. About 9% say they will pay more, 72% will pay the same or less, and about 17% ignore the sustainability issue altogether.

He went on to describe how the P&G corporate drive for sustainability can result in innovation down to individual products. For example, the company discovered that the Laundry Detergent category had the biggest negative energy impact among all of P&G’s businesses. That’s because a lot of energy is used in hot water washing cycles. This in turn helped drive innovation on brands such as Tide and Ariel that allow for better cleaning in cold water. And by advertising the benefits of cold water washing, P&G is helping to educate consumers on this simple yet meaningful step to reduce energy consumption. In the Netherlands alone, the company’s efforts have helped convince 52% of consumers to wash in cold water versus just 7% a few years ago.

Panel with Sir Martin Sorrell (CEO, WPP), Kevin Roberts (CEO, Saatchi & Saatchi), and Jim Stengel (Former Global Marketing Officer, P&G)

In one of the most disappointing parts of the event because earlier sessions ran very long, this panel of marketing giants was cut short. But there were a few good highlights from these strong voices for our industry.

Sir Martin spent time talking about how clients talk about holistic marketing, but their biggest barrier is actually their own behavior. They cannot seem to overcome the internal politics and silos of their organizations: “The amount of time we see our clients wasting on bureaucracy and infighting is appalling.” I wholeheartedly agree.

Kevin Roberts had some witty and accurate lines about what’s wrong with marketing today and what we need to do to fix it. Some of my favorites:

  • “The consumer is still not the boss at P&G; the brand is the boss… Consumers want to participate in building the brand.”
  • “It’s not B2B and B2C; it’s P2P—People to People.”
  • “Stop talking about touchpoints. Like the expression “counting eyeballs,” that’s not good enough. It’s about creating engagements, and we should measure return on involvement.”

John Pepper, Former P&G CEO and Disney Nonexecutive Chairman

Just days before the event, Procter announced that the CEO baton would be passing from A.G. Lafley to Bob McDonald, and we were lucky enough to have both A.G. and Bob join our event in Rome. What made the moment even more special was when John Pepper, another former P&G CEO, spoke for a few minutes about the success of A.G. and his confidence in Bob. I personally agree with John that Bob McDonald is a great choice for the role. I got to work for Bob when I was on the Tide brand in the late ’90s and found him to be an inspirational leader. (As an aside, on the Laundry floor I was jokingly known as “Little Bob” and McDonald was “Big Bob.”)

After praising Bob, Pepper talked a bit about how Disney thinks about sustainability in its operations and marketing. He made a great point about how “it’s key to record the company’s efforts around sustainability and promote them internally so that employees understand and value the work.” Pepper also talked about how Disney has a powerful ability to encourage sustainability and positive causes through its media channels and parks. Currently there are park exhibits that educate visitors about the need for environmental improvement, and Hannah Montana recently kicked off a Disney Channel effort that encourages kids to play a role in improving the world (see Disney.com/friendsforchange).

Finally, Pepper provided me with my personal highlight of the event. After his session I went up to hand him an advance copy of my book. The first thing he said was, “Well, any time someone gives me a book I have them sign it.” I was very touched to hear this request, which was actually the first time I have ever signed a copy of my book.

This interaction with John Pepper and the P&G alumni event itself reminded me of how special my time with this company has been. P&G took a risk in hiring me out of business school, and gave me incredible opportunities to challenge myself on big brands with big budgets. It trained me well and exposed me to some of the best marketers in the world. Now that I’m on the agency side with P&G as a client, the company has been an important partner for our success and growth as an agency—challenging us to continually take our game up a notch, and treating us with respect and fairness. Procter & Gamble has certainly improved my life and I look forward to continuing to build its business as an alum and agency partner.

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Posted in Sustainability, book | 2 Comments »

Value Tips from Food Retailing Forum

Monday, May 4th, 2009

I received a lot of attention from my recent posts about how to improve the value equation through meaningful marketing, so I assume that this is a very relevant topic for readers and Googlers. A few weeks ago, our friends at MVI hosted a Future of Food Retailing Forum here in Cincinnati. I was unable to attend the event, but one of our star Client Service Managers, Andrea Bollin, provided our agency with a nice summary of the event, which hit again and again on consumers’ value needs.

The main purpose of the conference was to hit many topics that are useful for vendors and suppliers of all types that serve retailers—and we attended to get more perspective for Bridge Worldwide’s major food retail client, Kroger. There were two main takeaways from the two-day conference that hit on both value and meaningful marketing:

1. “The New Premium”—The concept of what consumers expect in a “premium” brand is shifting dramatically due to the economic downturn, a concern for environmental sustainability, and an overall desire by people to make a more positive impact in their purchases. According to MVI, the new premium brands are transparent and have a focused purpose. New premium brands also never mention price, but instead show added value through their social, sustainability, and health/wellness contributions. In a world where premium brands are less and less better performing than low-cost store brands, they must differentiate along other lines that people care about. I’m very excited to see the future of marketing when leading brands innovate and create marketing along these lines.

2. Teach People New Skills—One of the conference sessions shared some emerging themes in consumer messaging. One specific example is the opportunity for brands to help consumers learn or rediscover new skills. A few things are driving this: (1) People are increasingly interested in “doing it yourself” to save money and enjoy an experience, but they need to learn how; and (2) young adults today spent less time in the kitchens, yards, and garages with their parents learning how to bake a cake, landscape, or change the oil, respectively, so there is a skill gap waiting to be filled. Teaching a skill is one of the big opportunities for brands that I explore in the upcoming book, using examples such as Home Depot’s in-store classes. The idea is that brands can close a sale and earn long-term loyalty by helping people better themselves.

Overall, it’s great to see more and more industry minds triangulating on the importance of marketing that itself adds to the value equation by improving people’s lives.

As a special offer to readers of this post, you can read Andrea’s brief summary of the event by downloading it here.

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Posted in Achievement, Cause Related, Conferences, Sustainability, Uncategorized, Value, purpose | 1 Comment »

Adding Sustainability to the Value(s) Equation

Wednesday, April 29th, 2009

(In June I will be going to Rome for the P&G Global Alumni Reunion. My parent company, WPP, will be preparing a small magazine for the event, and I was asked to write an article around sustainability. I have to turn it in next week and figured that I would share it here both for your enjoyment and feedback. Please let me know what you think in the comments below.)

In September 2008, Advertising Age challenged the practitioners of green marketing by raising the possibility that support for sustainability would decrease with the imploding global economy. A study by Duke University showed that CMOs ranked marketing that is “beneficial for society” as the last of five priorities over the next year. Meanwhile, in boardrooms and multiagency brand summits around the world, “value” has risen to the top of marketers’ concerns. While most think this is a clear shift from one priority to another, I believe both goals are achievable by shifting to a model of meaningful marketing that adds values to consumers’ brand decisions.

With the meltdown in the global economy, many marketers have given themselves a refresher crash course in the Marketing 101 definition of the “Value Equation”: (Product Benefits + Brand Equity) / Price. This formula naturally leads many brands to refocus their advertising efforts on long-ignored product benefits. Product demos and narrow superiority claims are back in vogue. Results in many cases are mixed.

I believe this textbook formula is due for a new edition—in the form of an addition to the numerator that recognizes the benefit that marketing itself can bring to the value equation. Let’s admit it: Historically, marketing has been dominated by unwanted, interruptive ad messages that hope to gain consumer attention for a few seconds. But with 3,000 ad exposures per day and technology such as DVRs and iPods that have little use for our messages, we are now forced to earn consumers’ attention by adding value through the marketing itself. We call this “Marketing with Meaning”—and examples include the Nike+ system that helps runners track their workouts, Samsung’s laptop-recharging stations in airports, and mobile cold and flu alerts from Vicks. These brands are putting marketing into the value equation:

Six months after Advertising Age raised the question, new studies show that consumers’ interest in buying green has not withered with the economy. A study of CPG/FMCG categories by IRI and TNS found that buying habits have continued a five-year shift toward sustainable spending, and that 30% of U.S. consumers feel it is important to purchase eco-friendly products. Overall, sustainability is still valued by a broad and growing share of the market.

Brands that are making the most gains through the economic crisis have closely tied sustainability between the product and marketing. The SunChips snack brand, for example, delivered on its brand promise to “grow the best snacks on earth” by moving to a completely solar-powered manufacturing plant; and it recently announced that it would release the first compostable bag by Earth Day 2010. Sales in 2008 were up 18%. Clorox worked with the Sierra Club to earn an endorsement of its new Green Works line of cleaners, and quickly rose to 42% share of this growing category.

Promotional efforts can also have a big impact when they allow the consumer to change behavior with help from the brand itself. For example, my team at Bridge Worldwide developed a program for the Kroger grocery chain in the U.S. that allows shoppers to go online and design their own reusable grocery bag. For each bag designed, Kroger offers a free disposable bag. This small step taps consumers’ creativity, encourages them to share, and saves the equivalent of more than 12 million plastic bags each day. The program is driving traffic to stores and increasing registrations to its loyalty-card program.

At the end of the day, the overarching story that encompasses both value communication and sustainability marketing is that consumers demand more than ever before from the brands that they choose to buy. For too long we have failed to turn our marketing itself into part of the value equation that consumers consider.  We need to make marketing itself more sustainable. As Jim Stengel said recently, “If the money we spent on marketing can be spent in a way that brings joy, help, and service to people… the industry will be far better off.”

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Posted in Conferences, Sustainability, Value | 5 Comments »

Living Sustainability

Wednesday, July 16th, 2008

One of the most exciting experiences since going public with our Marketing with Meaning approach is that we are able to build some great connections and feedback from a broad range of like-minded people. One example is Ruth Ann Barrett at direct marketing agency Red Direct. Red Direct is focused on serving clients in the high-tech industry, and they are seeing a shift toward consumer and client interest in sustainability.

Typically, advertising agencies serve in a strategic consulting and creative development role for clients. We sometimes have the chance to help our clients promote the cause of sustainability, by advertising products that are more environmentally responsible and/or by creating meaningful marketing that itself drives sustainability messages and results. One of our recent projects, for example, is a campaign for PuR water filters in which we are challenging people to reuse water bottles.

Ruth Ann Barrett and Red Direct are carving a new path, however. Instead of waiting for clients to come calling for sustainability ideas, the agency is diving in with its own initiative. They recently launched EarthSayers.tv, a Web prototype of a media channel dedicated to sustainability. The site includes a ton of video content, and, like a real business, advertising.

Red Direct is following a similar path to other advertising agencies in creating a new business venture that has nothing to do with traditional client service. A recent Ad Age article included examples such as the agency Mother selling candles and Anomaly selling shaving cream.

Building awareness around sustainability takes the idea to a much higher level – and it’s a great example of an advertising agency marketing with meaning.

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