Superbrands 2004 - Brand Autopsy

Superbrands
over to eToys and landing at Costello’s old
spot at Sears; Jerry Gramaglia, whose
resume includes top marketing jobs at Taco
Bell, Sprint and E*Trade; Russ Klein, currently
CMO at Burger King, who also ran
marketing at 7-Eleven and, before that,
7 Up. Finally, there’s Joe Tripodi, who was
CMO at MasterCard, then Seagram &
Sons before overseeing marketing at Bank
of New York and now Allstate.
The archetype of the Super CMO is Sergio
Zyman, the so-called “Aya-cola” of
Coca-Cola fame. Zyman, who joined Coke
in 1979, had a brilliant start, bowing both
Diet Coke and the “Coke is It” campaign
in 1982. But he also midwifed New Coke
in 1985 and, after that fiasco, left the company
to work as a consultant at Microsoft,
Miller Brewing, General Mills and
McDonald’s. Zyman came back to Coke in
the ’90s, but left again in 1998 and now
runs the Zyman Group, which consults for
various companies, most notably ConAgra.
Prior to the ’90s it was unusual for
marketers, even the top ones, to move
around much in their careers. Spencer
Stuart, the Chicago-based recruitment
firm, reported that since 1999 more than
60% of its marketing candidates were
placed into a different industry than their
former position. That’s a big jump over
1994-98, when only 38% of marketing
execs transitioned to other industries.
In the past decade there was a convergence
of trends that formed the super
CMO. Press attention, for one, including
the likes of Brandweek. A similar phenomenon
happened on a grander scale with
CEOs. By the ’90s, many chief executives
had hit a Page Six level of notoriety. Not
surprisingly, their pay skyrocketed and they
caromed from firm to firm. At the same
time, after Marlboro Friday, Wall Street
became sold on the value of brands and
marketing moved to center stage. Still one
more trend was the rise of the title of chief
marketing officer itself (see sidebar, page 12).
But has the cult of the star CMO been
good for business, or do these marketers
just ride in, make a splash—and leave
behind a mess in their wake?
A recent report by Spencer Stuart
S10 JUNE 21, 2004
“The real challenge is consistency.
It can be a risk when
people move from brand to
brand.” John Costello, speaking at
The Economist’s Marketing Roundtable
Monkey biz: Klein’s “pouch” spot for Burger King
(top); Gramaglia bowed E*Trade’s pitch chimp.
charged that new CMOs often “[send] the
current advertising agency into an unproductive
frenzy when they . . . immediately
question their predecessor’s strategy.”
Moreover, they can “demoralize the more
junior marketing professionals on the team”
when they come on board, the report said.
The report found only 14% of CMOs
“for the world’s top [100] brands” have
been at their companies for more than
three years. The chief reason for the
turnover was that CEOs (who have a much
longer average tenure)
often do not share high
expectations for marketing.
“And when there is
the added pressure from
shareholders, the media
and board of directors
for nearly instantaneous
results, the differences in
expectations can cause
major strife within the organization.”
Many observers also question the pre-
Enron orthodoxy that superstars needed to
be promoted and cultivated at the expense
of other employees. “What makes a star anyway?”
asked Al Ries, of Ries & Ries, Atlanta.
“It’s pr, publicity . . . Maybe they’re out promoting
themselves instead of the company.”
In each case of the mercenary CMO,
the marketers, perhaps unfairly, become
known for doing one thing particularly
well. Like a brand known for a certain product
or positioning, they are often defined
by those narrow confines.
John Costello:
The Ladies’ Man
John Costello is a prime example. A veteran
of Procter & Gamble (where he
worked on Crest’s first Hispanic TV ads)
and Pepsi, Costello joined Sears as
evp/gm of the retailer’s marketing unit
in 1993, replacing Matthew Howard, a 31year
Sears veteran. About six months after
joining Sears, Costello rolled an ad blitz
announcing “The softer side of Sears.”
The effort is remembered as one of the
top campaigns of the ’90s, but it may have
done more harm than good. “It was an
extremely successful campaign. It
brought in women,” said Kurt Barnard,
editor of the Upper Montclair, N.J.-based
Barnard’s Retail Report. “The problem was,
they were terribly disappointed.” The
retailer’s apparel just didn’t live up to the
hype, Barnard said. “Sears got a reputation
as America’s dowdiest store. It drove
[women] away in droves.”
Barnard is quick to add that Costello
had nothing to do with Sears’ apparel and
that he considers him a brilliant marketer.
Yet in that instance, brilliant marketing
backfired. Who was to blame?
Harry Bernard, a partner at Colton
Bernard, a San Francisco-based apparel
consultancy, said neither Costello nor
then-CEO Arthur Martinez nor even
Robert Mettler, the man who headed
Sears’ apparel business at the time of
the “Softer Side” campaign, are
culpable. (Mettler is now running West
Coast operations for Federated and
declined comment.)
“Martinez came in, it became apparent
he was going to have to fight and the
old culture won,” said Bernard. “They
have not found it easy or affordable in
their terms to really develop a serious fashion
apparel business. The bottom line is
I don’t think they believed in it and
understood what had to be done.”
The issue continues. After considering
abandoning apparel in 2001, Sears is having
another go of it with new-format stores.
In the mid-’90s, with Sears on the comeback
trail, Costello became a hot property.
“One thing Sears had in the wake of its
first turnaround was a rich field of experienced
executives, and the headhunters
knew what they had done and where they
were,” wrote Martinez in his book, The
Hard Road to the Softer Side. But in the grand
scheme, Sears’ comeback didn’t last. “Sears
at the time was at the forefront of the
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