McDonald’s, Ford and AmEx among firms revamping marketing strategy
"The spark began where it always begins, at a restaurant downtown, in a shop on Main Street," intones a narrator as the camera lingers in a restaurant, bakery, and bike factory. "Entrepreneurs like these are the most powerful force in the economy. As we look to the future, they'll be there ahead of us." The music swells, and the narrator concludes: "While we're sure we don't know all the answers, we do know one thing for certain. We want to help."
The commercial, which began airing across the U.S. this summer, was developed by Ogilvy & Mather for American Express. Its mission: to cast AmEx not as a financial titan but as a humble service provider assisting mom and pops — establishments consumers typically like to support. AmEx, its gold-plated reputation tarnished by subprime bets, wants to regain the trust of its customers.
In the world of branding, trust is the most perishable of assets. Polling in recent months shows that increasing numbers of consumers distrust not just the obvious suspects — the banks — but business as a whole. In a phone survey conducted from May 26 to July 3 by public relations firm Edelman, only 44 percent of Americans said they trusted business, down from 58 percent in the fall of 2007. The shift in sentiment is forcing companies from Ford Motor to AmEx to tweak marketing and focus on rebuilding credibility. "Trust is what drives profit margin and share price," says Larry Light, CEO of the Stamford (Conn.) brand consultancy Arcature and a veteran of McDonald's and ad agencies BBDO Worldwide and Bates Worldwide. "It is what consumers are looking for and what they share with one another."
Not long ago, trust and reputation were the domain of the PR department. Marketing executives, by contrast, pushed products and brands using the classic Procter & Gamble two-step: spending huge sums to maintain "share of voice" — marketing speak for outspending rivals to drive brand awareness — and endlessly reminding consumers of the "unique selling proposition" (Tide won't fade colors).
Addressing critics
That approach doesn't work so well now — and not just because recession, job insecurity, and hammered home values have made consumers disinclined to part with their coin. The days of consumers passively absorbing a TV commercial — or, for that matter, a banner ad — are over. People research purchases as never before, and they read peers' opinions about brands and products. Meanwhile, the Web and smartphone have given companies a cheap way to reach consumers and adjust their message on the fly. That, says Light, is why "share of voice and unique selling propositions are easily copied by competitors."
Even before the economic meltdown, companies with trust issues began realizing they couldn't keep talking past the problem with slick television commercials. One of those companies was McDonald's, long vilified for serving unhealthy food. Global Chief Marketing Officer Mary Dillon says McDonald's made a tactical decision to enter the conversation. "Trust and transparency [are] more important to us than ever," she says.
After years of fending off — or ignoring — critics, McDonald's has begun working with them. Following pressure from the People for the Ethical Treatment of Animals, McDonald's used its influence to force egg suppliers to raise the living standards of hens and cease debeaking them. PETA has publicly lauded the company for its efforts. The company declined to fight New York City's law forcing restaurants to post calorie counts on menus and says it supports making the rule national. Of course, McDonald's hasn't completely won over its critics. It is currently at an impasse with PETA, which wants U.S. poultry suppliers to stop using an electric jolt to kill chickens.
The fast-food giant, aware that many consumers still consider its food junk, talks constantly about the quality of its products, slicing off a chunk of its ad budget to focus on how it sources food. "We use 100% beef in every burger, and there's no percent better than that," reads one ad. The company's "Food, Nutrition & Fitness" Web site invites visitors to "meet" and "go behind the scenes with" the chain's beef, vegetable, chicken, and egg suppliers.
Boosting brand value
It's true that McDonald's cheap eats have helped it prosper during the recession and boosted the value of its brand. But its overall image appears to have improved, too. According to the global consulting firm Reputation Institute, McDonald's score, on a scale of 100, has climbed eight points since 2007, one of the fastest gainers, though its 63 remains slightly below average for all companies.
Auto brand stewards typically spend most of their money pushing new models. Ford Motor marketing chief Jim Farley is doing that. But he is also trying to build credibility by telling the world at large how well-managed Ford is (the implicit message being that Ford is better run than GM and Chrysler, which took taxpayer money to survive). Most car buyers are small business owners or employees, Farley notes, and have strong opinions about how companies are managed. "They will trust a company they believe is run really well," he says.
Ford has diverted money usually spent on vehicle discounts and used it to pump up the PR budget. A staffer, assigned to social networking full-time, generates a firehose of messages about Ford. These include the usual superlatives about the vehicles: their quality, style, fuel economy, and so forth. But the automaker's better-than-expected earnings have also been getting a relentless airing via Facebook, Twitter feeds, and sundry blogs. Communications staffers, meanwhile, are mining the company for stories that reflect how the company is being run more intelligently than its rivals — including its push to save costs by making one car for multiple markets. "Maintaining our independence from government ownership was a huge point of pride and fed into our guiding idea of a professionally run company," says Farley.
Ford's current ads, meanwhile, look nothing like previous campaigns. Gone are the warm, fuzzy, and inspirational commercials celebrating the American dream and hard work. The company no longer mines its 105-year history the way it used to, when it featured Chairman Bill Ford talking about innovation against archival footage of Model Ts and Henry Ford. Instead, the automaker is targeting consumers' rational left brain, relentlessly pushing themes that inspire street cred: new technology, fuel economy, quality scores. Farley says he has had to stare down colleagues and dealers complaining that the advertising is insufficiently uplifting. But he insists the new approach is working. Ford's retail market share is up 1 percentage point this year. Meanwhile, Ford is now spending $1,800 less on incentives per car than it did a year ago, and consumers are forking over on average $1,300 more for Ford models — a combination that drives the leading booster of customer trust: resale value.
Ford has a pretty good story to tell. Financial firms don't. And sometimes the first instinct is to duck. Randall Beard, who until recently was chief marketing officer at UBS's private wealth management group, recalls sitting at a strategy session last December when a senior executive said: "Our first strategy should be to try and stay out of the headlines." It didn't take a PhD in communications to know that wouldn't fly. Instead, Beard says, he tried to persuade the bank to be more transparent and open. Consumers are telling companies "in a thousand ways," says Beard, "that if you aren't open with me, then I won't trust you." It gets to be counterproductive to fight that, says Beard, who has since left the company, because "it's really easy for consumers to check and verify a company's behavior to find out if a company's actions match its words." UBS says it has armed staff with answers to potential queries from clients and set up a section on its Web site dedicated to explaining the U.S. Justice Dept.'s tax investigation into the company.
Rebuilding relationships
AmEx, as a consumer brand, had little choice but to rebuild its relationship with customers. The card issuer, which traditionally has targeted a more affluent demographic, has long had an image advantage over rivals Visa and MasterCard. That reputation was dented when it became clear that AmEx, like everybody else, had issued cards to risky borrowers.
Chief Marketing Officer John D. Hayes invited sales executives from three groups — consumer, small business, and the merchant services, which collects transaction fees when cards are swiped — to brainstorm a campaign about trust and caring that would reach all of their customers at once. The insight: Many of AmEx's merchant clients were small businesses. And average cardholders feel good about patronizing small businesses. That led to the television campaign.
At the end of the commercials, viewers are invited to visit Openforum.com, an AmEx Web site that provides tips for small businesses. AmEx is also co-sponsoring NBC Universal's "Shine a Light," a contest in which people send in stories about their favorite neighborhood business. The winning business gets $100,000 in marketing support. AmEx spokesperson Ellen DeGeneres promoted it and twittered about it, reaching her 3 million-plus followers. "There are a lot of people concerned about what's happening to these storefronts," says Hayes. "We're not only saying we serve those people, it's demonstrating we've got their best interest in mind."
Will the trust offensive work? Image counselors caution executives to stay relevant to the current mood or risk being seen as spin merchants. "The AmEx ads should resonate because merchants, especially during a recession, want some form of acknowledgement that they are the economy's engine, not cultural villains," says crisis management consultant Eric Dezenhall. But he warns: "Trust-related marketing only works if there is a message that people want to believe in. You cannot spin an audience that doesn't want to be spun."
David Kiley and Burt Helm
The commercial, which began airing across the U.S. this summer, was developed by Ogilvy & Mather for American Express. Its mission: to cast AmEx not as a financial titan but as a humble service provider assisting mom and pops — establishments consumers typically like to support. AmEx, its gold-plated reputation tarnished by subprime bets, wants to regain the trust of its customers.
In the world of branding, trust is the most perishable of assets. Polling in recent months shows that increasing numbers of consumers distrust not just the obvious suspects — the banks — but business as a whole. In a phone survey conducted from May 26 to July 3 by public relations firm Edelman, only 44 percent of Americans said they trusted business, down from 58 percent in the fall of 2007. The shift in sentiment is forcing companies from Ford Motor to AmEx to tweak marketing and focus on rebuilding credibility. "Trust is what drives profit margin and share price," says Larry Light, CEO of the Stamford (Conn.) brand consultancy Arcature and a veteran of McDonald's and ad agencies BBDO Worldwide and Bates Worldwide. "It is what consumers are looking for and what they share with one another."
Not long ago, trust and reputation were the domain of the PR department. Marketing executives, by contrast, pushed products and brands using the classic Procter & Gamble two-step: spending huge sums to maintain "share of voice" — marketing speak for outspending rivals to drive brand awareness — and endlessly reminding consumers of the "unique selling proposition" (Tide won't fade colors).
Addressing critics
That approach doesn't work so well now — and not just because recession, job insecurity, and hammered home values have made consumers disinclined to part with their coin. The days of consumers passively absorbing a TV commercial — or, for that matter, a banner ad — are over. People research purchases as never before, and they read peers' opinions about brands and products. Meanwhile, the Web and smartphone have given companies a cheap way to reach consumers and adjust their message on the fly. That, says Light, is why "share of voice and unique selling propositions are easily copied by competitors."
Even before the economic meltdown, companies with trust issues began realizing they couldn't keep talking past the problem with slick television commercials. One of those companies was McDonald's, long vilified for serving unhealthy food. Global Chief Marketing Officer Mary Dillon says McDonald's made a tactical decision to enter the conversation. "Trust and transparency [are] more important to us than ever," she says.
After years of fending off — or ignoring — critics, McDonald's has begun working with them. Following pressure from the People for the Ethical Treatment of Animals, McDonald's used its influence to force egg suppliers to raise the living standards of hens and cease debeaking them. PETA has publicly lauded the company for its efforts. The company declined to fight New York City's law forcing restaurants to post calorie counts on menus and says it supports making the rule national. Of course, McDonald's hasn't completely won over its critics. It is currently at an impasse with PETA, which wants U.S. poultry suppliers to stop using an electric jolt to kill chickens.
The fast-food giant, aware that many consumers still consider its food junk, talks constantly about the quality of its products, slicing off a chunk of its ad budget to focus on how it sources food. "We use 100% beef in every burger, and there's no percent better than that," reads one ad. The company's "Food, Nutrition & Fitness" Web site invites visitors to "meet" and "go behind the scenes with" the chain's beef, vegetable, chicken, and egg suppliers.
Boosting brand value
It's true that McDonald's cheap eats have helped it prosper during the recession and boosted the value of its brand. But its overall image appears to have improved, too. According to the global consulting firm Reputation Institute, McDonald's score, on a scale of 100, has climbed eight points since 2007, one of the fastest gainers, though its 63 remains slightly below average for all companies.
Auto brand stewards typically spend most of their money pushing new models. Ford Motor marketing chief Jim Farley is doing that. But he is also trying to build credibility by telling the world at large how well-managed Ford is (the implicit message being that Ford is better run than GM and Chrysler, which took taxpayer money to survive). Most car buyers are small business owners or employees, Farley notes, and have strong opinions about how companies are managed. "They will trust a company they believe is run really well," he says.
Ford has diverted money usually spent on vehicle discounts and used it to pump up the PR budget. A staffer, assigned to social networking full-time, generates a firehose of messages about Ford. These include the usual superlatives about the vehicles: their quality, style, fuel economy, and so forth. But the automaker's better-than-expected earnings have also been getting a relentless airing via Facebook, Twitter feeds, and sundry blogs. Communications staffers, meanwhile, are mining the company for stories that reflect how the company is being run more intelligently than its rivals — including its push to save costs by making one car for multiple markets. "Maintaining our independence from government ownership was a huge point of pride and fed into our guiding idea of a professionally run company," says Farley.
Ford's current ads, meanwhile, look nothing like previous campaigns. Gone are the warm, fuzzy, and inspirational commercials celebrating the American dream and hard work. The company no longer mines its 105-year history the way it used to, when it featured Chairman Bill Ford talking about innovation against archival footage of Model Ts and Henry Ford. Instead, the automaker is targeting consumers' rational left brain, relentlessly pushing themes that inspire street cred: new technology, fuel economy, quality scores. Farley says he has had to stare down colleagues and dealers complaining that the advertising is insufficiently uplifting. But he insists the new approach is working. Ford's retail market share is up 1 percentage point this year. Meanwhile, Ford is now spending $1,800 less on incentives per car than it did a year ago, and consumers are forking over on average $1,300 more for Ford models — a combination that drives the leading booster of customer trust: resale value.
Ford has a pretty good story to tell. Financial firms don't. And sometimes the first instinct is to duck. Randall Beard, who until recently was chief marketing officer at UBS's private wealth management group, recalls sitting at a strategy session last December when a senior executive said: "Our first strategy should be to try and stay out of the headlines." It didn't take a PhD in communications to know that wouldn't fly. Instead, Beard says, he tried to persuade the bank to be more transparent and open. Consumers are telling companies "in a thousand ways," says Beard, "that if you aren't open with me, then I won't trust you." It gets to be counterproductive to fight that, says Beard, who has since left the company, because "it's really easy for consumers to check and verify a company's behavior to find out if a company's actions match its words." UBS says it has armed staff with answers to potential queries from clients and set up a section on its Web site dedicated to explaining the U.S. Justice Dept.'s tax investigation into the company.
Rebuilding relationships
AmEx, as a consumer brand, had little choice but to rebuild its relationship with customers. The card issuer, which traditionally has targeted a more affluent demographic, has long had an image advantage over rivals Visa and MasterCard. That reputation was dented when it became clear that AmEx, like everybody else, had issued cards to risky borrowers.
Chief Marketing Officer John D. Hayes invited sales executives from three groups — consumer, small business, and the merchant services, which collects transaction fees when cards are swiped — to brainstorm a campaign about trust and caring that would reach all of their customers at once. The insight: Many of AmEx's merchant clients were small businesses. And average cardholders feel good about patronizing small businesses. That led to the television campaign.
At the end of the commercials, viewers are invited to visit Openforum.com, an AmEx Web site that provides tips for small businesses. AmEx is also co-sponsoring NBC Universal's "Shine a Light," a contest in which people send in stories about their favorite neighborhood business. The winning business gets $100,000 in marketing support. AmEx spokesperson Ellen DeGeneres promoted it and twittered about it, reaching her 3 million-plus followers. "There are a lot of people concerned about what's happening to these storefronts," says Hayes. "We're not only saying we serve those people, it's demonstrating we've got their best interest in mind."
Will the trust offensive work? Image counselors caution executives to stay relevant to the current mood or risk being seen as spin merchants. "The AmEx ads should resonate because merchants, especially during a recession, want some form of acknowledgement that they are the economy's engine, not cultural villains," says crisis management consultant Eric Dezenhall. But he warns: "Trust-related marketing only works if there is a message that people want to believe in. You cannot spin an audience that doesn't want to be spun."
David Kiley and Burt Helm
