Will the threat of a class-action lawsuit force advertising to finally solve its diversity problem?

Dec 1, 2008

-By Andrew Adam Newman

Black athletes, musicians and actors figure more prominently in ad campaigns than ever, but the chances that African Americans actually created those ads are pretty slim.

According to Bureau of Labor Statistics data from January 2008, the advertising field -- defined as advertising and PR agencies, as well as media, direct mail and other operations exclusively devoted to creating and delivering ads -- is just 5 percent African American, 3 percent Asian and 8 percent Hispanic or Latino. Those numbers are particularly stark considering that New York, the city with the highest concentration of ad agencies, is only 45 percent white, according to U.S. Census data. USA Today recently dubbed the ad industry "a poster child for a dearth of diversity."

For more than four decades, civil rights groups have accused the ad business of violating equal-opportunity hiring laws. In 2006, the New York City Commission on Human Rights (NYCCHR), acting on a complaint from Sanford Moore, an African American who had worked at agencies including BBDO, launched an investigation of 16 prominent New York firms, including BBDO, DDB, Ogilvy & Mather, Saatchi & Saatchi and Young & Rubicam. The agencies settled with the commission, committing to increase diversity over three years.

In the wake of that settlement, some agencies have increased the number of minorities working in their shops. And the industry as a whole is making progress, according to Nancy Hill, who became the American Association of Advertising Agencies' first female CEO this year, and whose commitment to diversity has been lauded by Moore and others. "I know the industry still has a long way to go," Hills says. "But a lot of things are starting to come together."

But the data suggest that some shops have merely donned a fig leaf -- offering bromides about how their hiring process is "colorblind," doing pro bono work for minority causes, but still hiring only those who look like them.

Soon, those shops could be in for a day of reckoning, as Cyrus Mehri, the civil rights lawyer behind several landmark racial discrimination suits -- including those against Coca-Cola (which settled for $193 million) and Texaco (which settled for $176 million) -- is now targeting the advertising business. The result could be the dropping of so many fig leaves that the industry will need a rake.

Mehri says he has been contacted by "people from inside the industry who have suffered discrimination" and that his firm will soon issue a report on African Americans in advertising. (Critics agree that the situation with African Americans is unique, since they have been confronting both racial stereotypes in advertising and the lack of professional opportunities for more than a half century.) Using Census and Equal Employment Opportunity Commission data, the report will benchmark advertising against 28 other "persuasion" industries.

Among the findings in a preliminary report obtained by Adweek: African Americans make up only 3.2 percent of advertising's upper management in the U.S., well under half of the average of 7.2 percent in similar professions.

Mehri won't say whether he's preparing a class-action suit against agencies, but even if he isn't, he will likely leave the industry more diverse than he found it. Based on the remedies he and the late Johnnie Cochran prescribed in a study about the lack of black head coaches in the NFL, for example, the league adopted new hiring policies and more than tripled their ranks within four years.

Luke Visconti, co-founder of the magazine DiversityInc, who describes the ad industry's diversity efforts as "laughable," says advertising pros should take note that Mehri "can use the legal system to grind you to bits," but that he is reasonable in crafting constructive solutions.



As Mehri turns over rocks, there's no telling what he'll find. It behooves industry insiders to know what to expect from his efforts, how some of his prior targets have responded, and how certain companies -- some of them the ad industry's biggest clients -- have embedded diversity deep in their hiring and management practices.

Mehri's track record

"I've yet to see an industry that has such a consistent record of indifference to minority involvement," Mehri says of the ad business on the phone from his Washington law firm, Mehri & Skalet. "It has a history of purposeful discrimination. They've been on notice a long time, but they just go through the motions and allow a discriminatory climate to continue. They're real laggards, and it's hard to understand why."

One of Mehri's best-known cases, originally launched in 1996 on behalf of two management-level employees against Texaco, and which expanded into a class-action colossus representing 1,400 aggrieved black Texaco employees, alleged that in hiring and promotion the company had regularly chosen less-experienced whites over African Americans. Texaco fought the suit for more than two years, but after testimony that claimed managers had referred to workers as "niggers" and "porch monkeys," and a recording emerged of an executive referring to African Americans as "black jelly beans," Texaco sat down in 1997 to settle.

Along with $115 million that Texaco agreed to pay employees, it promised $35 million to fund an Equality and Tolerance Task Force -- consisting of civil rights lawyers, scholars, retired judges and executives -- that would increase diversity at the company. It also set aside $26 million to administer salary raises over five years to black employees.

In 1999, Mehri's suit on behalf of 2,200 former and then-current employees against Coca-Cola claimed that blacks at the company were widely overlooked for promotions.

Coke's settlement of $193 million the following year was unprecedented in its heft. It was also noteworthy because Coke agreed to fund a task force, which would include a former secretary of labor and a former chair of the Equal Employment Opportunity Commission, to overhaul hiring practices. The company also agreed to tie executive compensation to diversity hiring goals and issue four yearly progress reports to the court.

Coke even asked the court to oversee its progress for a fifth year.

From 2000 to 2006, among senior executives -- the ranks which industries have struggled hardest to diversify -- Coke increased minority representation from 8 percent to 21 percent. For "pipeline" jobs a tier below, from 2002 to 2006, Coke increased the proportion of minorities from 21 percent to 27 percent.

"The work that we do and the decisions that we make all focus on inclusive and fair behavior," Steve Bucherati, chief diversity officer at Coca-Cola, wrote in response to questions from Adweek. Bucherati also noted that 29 percent of Coke's North America marketing and advertising division are minorities, as is the leader of the advertising team.

These settlements are emblematic of how vast class-action discrimination suits, by Mehri and others, gained popularity in the 1990s not just to recompense plaintiffs, but also to reshape hiring policies.



As Nancy Levit, a law professor at the University of Missouri's Kansas City School of Law, wrote recently in the Boston College Law Review, cases like Texaco's "have encouraged greater use of litigation to address deeply entrenched corporate practices." The goal often "is not damages but transformation of the company's treatment of employees" and the opportunity to "make a difference in workplace inclusivity."

Mehri's impact on the NFL was just as striking. In 2002, he and Cochran issued a report called "Black Coaches in the National Football League: Superior Performance, Inferior Opportunities." Though more than two-thirds of the players in the league are black, no team had hired a black head coach until 1989. When Mehri and Cochran issued their report, only two of the league's 32 teams had black head coaches.

The report recommended requiring team owners to conduct a face-to-face interview with at least one minority candidate when hiring in the future. The NFL agreed to adopt the rule, which became known as the Rooney Rule, after Dan Rooney, the Pittsburgh Steelers owner who chaired the league's Workplace Diversity Committee.

In 2003, Detroit Lions gm Matt Millen hired Steve Mariucci, who is white, as head coach without interviewing any candidates of color. The NFL slapped Millen with a $200,000 fine. Other team owners complied with the rule after that and while doing so might seem merely symbolic, the results were dramatic.

Four years after the Rooney Rule took effect, the NFL reached an all-time high of seven African-American head coaches. (Today, there are six.) Before 2007, no African-American head coach had reached the Super Bowl, but both coaches that year -- Lovie Smith of the Chicago Bears and Tony Dungy of the Indianapolis Colts -- were black.

"What is done in the NFL is really transferable to the business world, because at base the process ensures that those who are making decisions sit down with candidates and have a conversation about the position," says Jeremi Duru, a law professor at Temple University's James E. Beasley School of Law, who worked for Mehri's firm when it issued the NFL report. "If you sit down face to face and talk about issues of shared concern, racial biases tend to be diminished."

Where top marketers stand

One thing that often happens when Mehri gets involved in a case is that Weldon Latham's phone rings. Both Texaco and Coke hired Latham -- a partner in the Washington, D.C., law firm of Davis Wright Tremaine and chair of its Diversity Counseling Group -- to iron out a settlement with Mehri.

When it comes to the ad industry, though, Latham actually was on the scene before Mehri. Omnicom Group hired him when its agencies BBDO, DDB, Merkley + Partners and PHD were among the 16 shops named two years ago in the investigation by New York's human-rights commission.

Latham, who has worked with numerous Fortune 500 companies not just to defend them against suits, but to help proactively develop multicultural initiatives, says business-to-business industries like advertising have been slow to adapt to diversity.

"Consumer products companies that interact with the public directly are usually a lot better about recognizing the value of diversity than a business-to-business company," he says.



DiversityInc's Visconti says, "If you believe people are created equally, then talent is distributed equally. If it's all white men in your executive committee, something went wrong."

Visconti's magazine has been compiling a Top 50 Companies for Diversity list for eight years. This year, 352 firms were evaluated on factors including the racial makeup of their workforce, CEO diversity policies and the use of minority- and women-owned suppliers.

Iconic companies crowd the list: The top five this year, in order, were Verizon, Coca-Cola, Bank of America, Pricewaterhouse-Coopers and Procter & Gamble.

Conspicuously absent from the list is an advertising agency, and in eight years an agency has never appeared. (Full disclosure: Adweek currently does not employ a single person of color among the 16 members of its editorial and design staffs.)

Adweek cross-referenced the 2008 list with the top 100 U.S. ad spenders for the first seven months of 2008, and found that four of the top five diversity companies are also top ad spenders. In all, 22 of the top diversity companies -- nearly half -- were among this year's 100 top ad spenders.

P&G, the largest ad spender, has a unit within its so-called "talent supply" team that "solely focuses on diversity recruiting," according to Maxine Brown Davis, the company's chief diversity officer, who responded to questions from Adweek in an e-mail. The company, she wrote, attends professional conferences held by groups with "high-potential diverse candidates," like the National Society of Black Engineers.

Verizon, the fourth-biggest ad spender, provided a statement in response to Adweek's questions, saying the company is committed to looking like America because "customers and constituents are increasingly diverse and require diverse employee experiences." The company ties 5 percent of upper management's pay to diversity: half for promoting minorities and the other half for contracting with diverse suppliers.

How agencies are responding

Clients increasingly are inquiring about diversity on the agency side, according to Heide Gardner, chief diversity officer for Interpublic Group. "They're pushing their values along the supply chain and they are interested in our progress," she says. "More clients are including questions about workforce and supplier diversity in RFPs. I would guesstimate that at least a third of all RFPs include questions about supplier and workforce diversity."

Agencies, however, are not keeping up in certain areas.

As part of their settlement with New York's human-rights commission, the 15 agencies (down from 16, after Draft and FCB merged) reported their minority hiring numbers for 2007 to the commission, and the results appeared impressive: As a group, they committed to have 18 percent of new hires be minorities, and on average they actually hired 25 percent.



But according to data from the NYCCHR as reported in Advertising Age, the number of African Americans hired -- which had been the original issue -- were still paltry. Moore, who brought the complaint to the commission, said he was discouraged by the African-American numbers and unswayed by the bright spots elsewhere. "Blacks are not the minority of choice" for those doing the hiring, he says. And he adds that he's seen minority hiring spurts before, only to see people of color leave the industry after bumping up against glass ceilings.

The NYCCHR was not able to provide data about those agencies' 2007 hiring results to Adweek by press time.

"You don't let someone off the hook for decades of blatant discrimination because they hire a few people," Moore says. "Madison Avenue has been about supporting, subsidizing and propagating a value system that marginalizes blacks, black media institutions, black creativity and black culture."

And advertising, he says, requires neither special degrees nor a particularly keen intellect: "Madison Avenue is one of the last places where undereducated whites can still make big money." White executives for decades, he adds, have told him that diversity was "the moral issue of our time" and that their own shops had a "level playing field." To which he counters, "If it were a level playing field, black people wouldn't be rolling off the playing field."

This is not to say there haven't been concerted efforts to diversify. Over the last few years, a handful of ad agencies have hired diversity officers whose primary focus is to increase recruitment, and to structure mentoring programs and affinity groups within the agencies. The programs build a supportive culture within firms that, consciously or not, have not always supported people of color, and in so doing may be beginning to crack the glass ceiling.

Gardner was named director of diversity for IPG in 2003 and, in 2007, was promoted to svp and chief diversity officer, marking the first time a person of color has served as an officer in the company. (Last year, IPG appointed its sole African-American board member, Jocelyn Miller-Carter, who owns a Florida technology company.)

According to Gardner, a major challenge involves not just hiring minorities, but keeping them on board, since turnover with minorities is 30 percent higher than whites at IPG. "This really speaks to the issue of sustainability," Gardner says. "We have done a much better job of recruiting" for entry-level jobs, she says, "but now we have to focus on the mid- and senior levels."

Today, 20 percent of the company's junior staff are minorities, but of the nearly 100 agencies that Interpublic owns outright or partly, only two are headed by African Americans: Larry Harris in 2007 was named president of the newly formed Ansible, a mobile marketing agency that is a joint venture between IPG and mobile technology provider Velti; and Steve Stoute is founder of Translation Consultation + Brand Imaging.

Gardner says the company does not go so far as the NFL and require a diverse candidate slate, but it "recommends" it.



She also says that some, but not all, of IPG's companies tie bonuses to diversity goals, a practice some experts say is a key to achieving diversity. For a senior executive, it can account for 10 percent to 15 percent of a bonus, or $40,000-60,000, according to Gardner.

Tiffany Warren, vp and director of multicultural programs and community outreach at Arnold, says the company has achieved its level of 31 percent non-white employees without tying executive pay to diversity goals, since "what works for a Fortune 500 company doesn't necessarily work for us."

An old problem

In his recent book Madison Avenue and the Color Line, about African-Americans' role in advertising over the last century, professor and advertising consultant Jason Chambers links the historically negative depictions of black people in ads to their limited opportunities in the industry.

"If one looks at advertisements as documentaries, then the world for much of the 20th century was one in which whites enjoyed the fruits of consumption and blacks, if visible at all, contentedly served them from the margins," Chambers writes.

The book, among other things, details how civil rights groups and the NYCCHR have decried the lack of representation in the industry -- and how agencies have vowed to remedy the situation -- for more than four decades.

In 1963, the Urban League of New York released a study that found of the more than 20,000 employees in the city's largest ad agencies, only 25 African Americans were in "creative or executive positions." Five years later, a report from the NYCCHR said the scarcity of African Americans and Puerto Ricans employed at ad agencies was "a state of de facto segregation strongly suggesting discrimination."

In the wake of that report, writes Chambers, virtually every major agency instituted recruitment and mentoring programs and diversified, but the programs were expensive and disappeared because of the recession in the early 1970s.

Reached at his office at the University of Illinois at Urbana-Champaign, Chambers puzzles at why ad executives seem to see diversity as a do-gooder issue rather than a bottom-line one. The firms' leaders, he says, should be asking themselves these questions: "Why aren't we as mediators between manufacturers and consumers pushing hardest for diversity? What level of insight creativity are we not getting because of that insularity?"

Leading a horse to water

After the NYCCHR began its latest investigation of the industry, the 4A's assembled a task force that culminated in a handbook, "Principles & Best Practices for Diversity and Inclusion in Advertising Agencies." It recommends establishing diversity goals and timetables, tying executive compensation to those goals, focusing recruiting both on minority universities and minority executive recruiters, increasing retention of minority employees through mentoring programs, and hiring more minority businesses as vendors.



Adonis Hoffman, the staff lawyer for the 4A's who wrote the handbook, says the trade group can only lead horses to water. "We can provide guidance and leadership and give them all the resources," says Hoffman, "but it becomes a matter of individual corporate will."

As for the forthcoming report -- and possible legal action -- from Mehri, Hoffman says agencies should accept his recommendations. "I wouldn't advise the companies to hunker down," he says. "I'd advise them to face this head-on and see what they can do, because it's an issue that has been bouncing around this industry for a long, long time."

Hill, the 4A's CEO, says the association is doing what it can. This includes the continuation of its AAAA Foundation, which has created a number of scholarships for multicultural aspirants, including the Bill Bernbach Minority Scholarship, the John Mack Carter Scholarship and Operation JumpStart.

In January, the association announced a partnership with Howard University to place multicultural talent in management at ad agencies, help African Americans transition from other industries into advertising and work with traditional black colleges to highlight the industry.

Also, Hill serves on the board of Together Our Resources Can Help (TORCH), which provides underserved New York City public high school students with exposure to career training and opportunities in communications and the arts. (Adweek publisher and editorial director Alison Fahey serves on the same board.)

On another front, Arnold's Warren hires interns to help out with the AdColor Awards, an initiative she co-founded last year to recognize creative achievement in five categories for multicultural talent both within agencies and at marketing departments in general-market companies.

One of those interns, Andy Deaza, is now 20 and recently moved to South Beach to study at the Miami Ad School. But Deaza, who is Dominican and Puerto Rican, did not find the ad business so much as the ad business found him. When he was a sophomore at Washington Irving High School in Manhattan, "I wasn't the best student and was kind of getting into trouble," he says. Deaza, whose favorite subject was art, was introduced to TORCH by his art teacher.

He threw himself into the program, was chosen to host its annual talent program (twice), attended an expenses-paid conference in San Francisco, and interned with JWT director of trendspotting Ann Mack and then Warren. Along the way, he says, he improved his grades and stayed out of trouble.

"There were definitely people helping guide the way," says Deaza. "If it wasn't for Debi [Deutsch, executive director of TORCH] and Tiffany, I wouldn't know about the industry. For whatever reason, white people know about the industry, but we don't -- I don't know why."

Hill met Deaza not long ago.



"The night I met this kid and heard his story, the hair on my arms stood up," Hill says. "What it says to me is that you have to attack this problem from many different angles and when you see the programs come together in one individual like Andy, you know our efforts are worth it."

Asked if he had a dream client he'd like to work for one day, Deaza does not even have to think about it.

"Nike," he says. "I've been a Jordan fan all my life and I'm too young to have seen him play growing up. But those Spike Lee commercials -- man, things like that are the reason I love this industry. To be able now to be so close to making something like that is surreal -- that gives me the chills. If I ever got to put a swoosh on the end of something, I'd be a happy man."

Do clients that spend more care more?

Is there a correlation between a company's diversity achievements and its level of ad spending? Below are the top 25 firms on DiversityInc's current list of the Top 50 Companies for Diversity. If the company also ranks among the top 100 U.S. ad spenders through the first seven months of this year, that rank appears after the firm's name. As you can see, four of the top five companies on the list are also among the top ad spenders in the country.

1 Verizon Communications (4)

2 The Coca-Cola Co. (44)

3 Bank of America (59)

4 PricewaterhouseCoopers

5 Procter & Gamble (1)

6 Cox Communications

7 Merrill Lynch & Co.

8 Johnson & Johnson (5)

9 IBM

10 American Express (61)

11 Marriott International

12 Sodexo

13 JPMorgan Chase (71)

14 Wachovia (97)

15 Blue Cross and Blue Shield of Florida

16 Deloitte LLP

17 Ernst & Young

18 HSBC Bank USA, NA

19 Starwood Hotels & Resorts Worldwide

20 Cummins

21 Merck & Co. (74)

22 AT&T (3)

23 Turner Broadcasting System

24 Prudential

25 Monsanto Co.

Andrew Adam Newman is a frequent contributor to The New York Times whose work has appeared in New York magazine, Salon and on National Public Radio's "Studio 360 with Kurt Andersen."

Labels: advertisement

Marc Ecko sits down with NY Report Editor-in-Chief Rob Levin

December 1, 2008

By: Robert S. Levin

In 1984, Marc Milecofsky was a 12-year old boy airbrushing his sweatshirts and hats in the garage of his parents’ Lakewood, N.J., home. Fast forward 23 years, and that same kid, now called Marc Ecko, sits in a studio atop his global headquarters on 23rd Street in Manhattan, with artists on his payroll to do his painting for him. Marc Ecko Enterprises is a billion-dollar corporation that has survived highs and lows so drastic they would give a NASA pilot vertigo. Founded in 1993, the company produced the hip-hop-inspired designs that Gen Xers across the country had been clamoring for. Today the company consists of several apparel lines (including ecko unlimited, eckored, ecko kids, Cut & Sew, Zoo York and Avirex) and two media divisions (Complex magazine and Marc Ecko Entertainment, which develops video games). In addition to his wholesale business, Ecko has 70 retail locations and is aiming for a total of 150 by the end of 2010. The father of three (6, 4 and 2 years old) has also launched philanthropic initiatives to help underserved children in the U.S. and in the Ukraine.

While his parents’ garage in Lakewood is only 50 miles from his Chelsea headquarters, Ecko is in a whole different world. From close calls with bankruptcy and professional missteps to becoming a modern marketing innovator, Ecko is far from where he started. The success of his company, which now employs 2,000 people worldwide, does not rest solely on clever T-shirt designs. Ecko’s innate marketing savvy and relentless efforts to better understand his marketplace are the true drivers of his success.

Ecko, a Rutgers University School of Pharmacy dropout, takes pride in aligning himself with American pop culture. For example, in 2007, he bought the infamous Barry Bonds baseball — the one he hit out of the park to shatter Hank Aaron’s longstanding home-run record — for $750,000. Never one to shy from controversy, Ecko then held an online poll and allowed the public’s votes to decide the fate of the ball. More than 10 million people logged on to Ecko’s site, and the majority voted to put the ball in Cooperstown’s Baseball Hall of Fame with an asterisk symbolizing the widely held belief that Bonds achieved his record with the help of performance-enhancing drugs. Editor-in-chief Robert Levin spoke with Ecko, a direct and “illustrative” communicator, about rescuing his company from near ruin, marketing triumphs and Yoda.

RL: You started ecko unlimited at age 20. How did you get started in the fashion industry?

ME: I had a wide-eyed love for art and illustration, particularly graffiti, growing up. But I couldn’t go to write graffiti on trains since there really weren’t any trains running through Lakewood. The kissing cousin to the aerosol spray paint can was airbrush. So I tried to shine up my illustration chops.

When I got to high school, painting T-shirts was like a self-validation play among my peers because my peers would acknowledge me as “talented.” It all felt good, and it was something I did better than most, and I stood out. I excelled at art versus at academics or athletics.

After graduation, I went to Rutgers College of Pharmacy in 1990, and it really highlighted what I was good at, what I wasn’t good at, and what I was passionate about. In school, I was very average. After class, I would go paint T-shirts and sweatshirts and sell them. I had cash in my pocket all the time and I really fell in love with it. So, in the summer of 1992, I asked my dean [if I could] take a year off, and in 1993 I started my business. I went from painting one T-shirt at a time to screen printing them.

It was a typical do-it-yourself, sell-out-of-the-trunk-of-your-car kind of story. Nothing was really that unique, except for the fact that the line between my adolescent ambitions and my professional ambitions blurred together so completely that it kept a piece of my brain permanently between the ages of 16 and 22. Those years really shaped my point of view, and it’s pretty much been the core demographic that I’ve emphasized and grown my business on.

RL: How did you go from selling out of the trunk of a car to selling it to the stores?

ME: There were a lot of brands that existed when I was coming up that are no longer around or are still quite small. I remember there was this pressure — [the other young streetwear designers and I] all felt like we were presenting something that was unique. There was a lifestyle, sub- or counterculture fashion that emerged 20 years prior, and we were the second wave of that — the streetwear wave. I was fortunate to be there at a time in the market where we were all new and young, and we felt like we were part of a movement. But the difference between me and a lot of my peers was that I didn’t limit my ambitions to the group’s ambitions. I wasn’t a groupthink guy. I wanted to go for it all.

I remember my friends in the business were selling to Patricia Fields [a designer who had a store on Broadway in the Village] or Extra Large [the Beastie Boys’ store in the Lower East Side and L.A.]. I’d walk into these stores; they’d be as big as my desk, and all the T-shirts sold for $36 each. It didn’t make any sense to me. I wanted to have my T-shirts where people bought their sneakers. I remember going to Dr. J’s on Market Street in Newark, N.J., to pick up sneakers. I wanted to buy T-shirts at the same place I bought sneakers. But my peers at the time said, “Oh, my God, how can you sell there?” I’d say, “Because I want [my T-shirts] where real people are shopping and where people are going to see them. I don’t want it to be an inside joke.”

Maybe it was delusions of grandeur or maybe a little bit of a Napoleon complex, but I wanted to be the Ralph Lauren for my generation. I wouldn’t be about silk ties and peak lapels, but I aspired to what that meant in terms of the breadth and scope from a brand perspective. So I put my head down and I focused on that.

RL: So you were a designer and a marketer while your competitors were just designers.

ME: I didn’t know what the word “marketing” meant until I hired my third marketing executive. It was less about having marketing chops and more about having the common sense that the consumer was going to validate me. I was bold enough to not let anyone try to define my consumers so narrowly.

RL: You market to the 13 to 30 demographic and for a long time you were part of that demographic. As you get older, do you worry if you can still serve the 13- to 30-year-olds?

ME: My demographic is growing, but I don’t worry about getting older. Look at Bill Parcells, Tom Landry, Vince Lombardi or any great coach in history; especially coaches that were once players. How does a guy like Parcells manage to get guys a third of his age to break themselves for him? I’m going to get older. I can’t forever be in the sweet spot of my demographic, but I could compel my staff to heed some of my life experiences so that they could be more effective design leaders, marketing leaders and executives. Age and the fact that I’ve gotten to travel the world makes me more astute with the business and less emotional.

Growing Up on the Job

RL: How do you spend most of your time now? Are you providing leadership, or are you still getting involved in a lot of the details?

ME: You can’t micromanage your way to success and you can’t get overly caught up in all of the details. I micromanaged this company for the first six or seven years. I’d wonder why I couldn’t keep my really good designers. It was because I was micromanaging them and they would go work somewhere else. I didn’t have the tolerance to allow them to get some blood in their mouths. It’s no different than how I am with my two-year-old now. She bangs her lip on the stairs and I tell her, “Shake it off, put some ice on it. You’re OK.” But she’s my third child. With my first one, I was like, “Oh, my God, call the hospital. She’s bleeding!”

So, am in the weeds on everything? No. I’m more engaged with certain projects. For instance, right now we’re doing a lot of research for potential new licensing opportunities, and I will get very, very heavily engaged in the global, big idea there. Once the big idea is set, you have to let the ship ride its course. I am not going to be so arrogant to think that the first thing that comes out of my head is the absolute ideal thing for the market. No one person can do that, not even Steve Jobs.

RL: As a business owner, what do you think was the biggest mistake you made?

ME: Oh, goodness! I’m constantly making mistakes. I don’t know that there’s any one big one.

RL: In ’98, you had a big cash problem. Your business was nearly $7 million in debt. Was that one of your biggest mistakes?

ME: I almost went bankrupt, but that wasn’t my biggest mistake. They were dumb mistakes: not being aware of supply side, not knowing how to ship and receive, spending more than I had, not knowing how to keep a budget, and not knowing how to be unemotional about design.

When I think of those years of being $6.5, $7 million in debt, I don’t reflect on those as mistakes. I find them to be the most relevant parts of my learning experience, because I was forced to learn how to do more with less. When you don’t have [resources], it forces you to innovate. You have to compete with an idea rather than with the dollar, and that’s a discipline we always try to condition ourselves on. It’s still in the culture of this organization; even though now we are — from a gross sales point of view — quite large, we still find that the best ideas come out of this organization when people are really forced and reminded to innovate with less.

The biggest mistakes are those moments when you get a little drunk [on success] or when you think you can walk on water, and you fall into that [pattern] of repeating the same mistakes. That’s the biggest mistake that I’ve ever made — allowing myself to repeat my mistakes.

Creating Culture

RL: You mentioned earlier that you have to really focus on who your customers are. How do you instill that into your corporate culture?

ME: There are mechanisms in place that attempt to do that. We’ve got daily sales reports that go to all the key managers and give people daily updates on what’s selling and what’s not selling. This provokes conversation between designers and sales people. Then that discussion becomes part of the social context [at the company]. That’s a best practice of the industry — that’s not something we invented.

We’ve also created a culture within the marketing team that encourages them to always look for that next big crazy idea, of which probably 5% actually gets executed. But when that 5% actually happens, people get a tremendous sense of ownership, a tremendous sense of building something from nothing that wasn’t necessarily on a business plan. So there’s a 95% tolerance to do all this wild stuff that’s far out of the range or the scope of our plan or capacity or budget, but we allow it, we encourage it, we cultivate it.

RL: How do you cultivate that type of environment?

ME: Wild ambition is quite stimulating. My business partners and I are serial entrepreneurs and we’re not going to limit ourselves. When I brewed up the idea for Complex, I was way deep in debt. That idea could never have manifested its way to the top if this organization was publicly held or owned by a larger company. It probably would have been suffocated and stifled early.

RL: Given the culture of the company, are there specific qualities you look for in employees?

ME: We don’t have the most refined human resource process. Maybe the parent in me, the nurturer in me, wishes that we could be better at vetting, better at nurturing, but we don’t have that kind of a culture. We push people out of their comfort zones. People that don’t have the chops to deal with a little bit of anxiety aren’t going to be able to swim here. They’re going to sink.

We just try to let employees know coming in that it’s going to be disruptive, that things are fluid. The sands are going to shift, not because someone’s trying to undermine you or for some emotional reason, but because that’s the way the industry is. So people who aren’t adaptive don’t necessarily do well here. The multi-disciplinarians are the ones that are the most useful, for sure.

The Virtues of Retail

RL: What went into the decision to get into retail?

ME: Best practices of other brands tell me I have to do it. [Retail] was out of my comfort zone; therefore, I needed to make it my comfort zone. With retail, you control your own destiny — everything from controlling the marketing message at the point of sale to getting faster and more accurate feedback on the product. Having your own retail stores gives you an amazing aptitude to correct your product range. You could test something in real time in the market. Also, we can present our own brand in a more meaningful way than anyone else can present it for us. I only wish I did it sooner.

RL: Did your company have a lot of experience running retail?

ME: Zero.

RL: So how did you tackle that?

ME: You screw up. You have to have the tolerance for screwing up. There needs to be a line item in your budget that says, “Screwing up.” You might call it something prettier for the bank, like miscellaneous. But you’ve got to pad [the budget] and you have to have that tolerance.

I started the [retail] business in outlets to cut my teeth. If you look at Ralph Lauren’s numbers, his predominant retail business comes from his outlet business. [Outlets] are less cost per square foot and so I could take my time to figure out: Do I have the staff for this? Do we need to hire regional managers? What about computer systems, restocking from my warehouse as I react to the department store versus my own stores? Slowly, we kept tweaking, tweaking, tweaking, and finally we were ready for our first [full-price] store. Outlet and [full-price] are two different things, but you learn the basics, like working your way up to a black belt.

RL: How did your wholesale clients feel when they heard that you were going into retail?

ME: They’re fine with it. In fact, many of them were eager — especially the bigger box retailers — because it helps strengthen our brand equity. It helps put the flag in the ground that you’re not going anywhere.

Next Generation Marketer

RL: In addition to the fashion brands, you have Complex magazine and Marc Ecko Entertainment. Do you see those as tied into the brand?

ME: I see them as related. I don’t operate like an ambassador brand, like Nike. Nike owns all things sports — from Tiger to Jordan to Bo Jackson. That’s an ambassador brand. They came up during the ’70s and ’80s, when you could run a TV spot and actually make a dent. In those days, you could have a “revolution moment” like a Super Bowl ad. Those are best practices of another era, another time.

In this day, when media is so atomized and disparate, how do you communicate [to your market]? How do I make a dent? Some of the laws of authorship and branding have changed. It’s less about the heavy-handed branding and more about the authorship. I want to convince consumers that I can author other things and I get credit for being more than just a one-dimensional fashion designer.

RL: With Complex, for example, how do consumers identify it with Marc Ecko if doesn’t have “heavy-handed” branding?

ME: The core readers of the magazine know that it’s us. Besides, how can I be heavy-handed about my brand and expect Diesel to advertise inside there? The first six pages of ads in the magazine are competitors. So I needed to back away in order to make the advertisers comfortable. How do I transcend being just a designer? By doing something more than what a designer would do. That’s what Complex is about. It’s the same with Marc Ecko Entertainment. I’ve got the license for Dexter, the Showtime TV series, and we’re creating a [video] game that comes out in ’09. We’ll create an iPhone game also. But it’s not like players will be Dexter killing a guy wearing an Ecko T-shirt. We’ll have a small mention on the back of the box, but not in the game. Enough consumers will know it’s Ecko. It’s like a “Six Degrees of Marc Ecko” thing that I’m trying to create; I think it could be meaningful to the brand.

I could have just taken those resources and bought big outdoor billboards, but would it effectively create the same kind of emotional transaction as being a guy who could author a moment of pop culture? Who could author some new consumer product that’s kind of cool and sometimes very logically associated to the brand? It’ll make you scratch your head and think, “Wow! I didn’t expect that from him.”

RL: I imagine that people want to partner with you all the time. How do you decide which ones you’re going to go forward with?

ME: The most important thing [for] any designer, creator, business leader or anyone who is holding the pen to make the transaction to fund something is to decide what you don’t do. That’s the hardest thing.

RL: Marc Ecko Enterprises is a privately held company. Any plans to take it public or to exit?

ME: I don’t know. I can’t really see further than three or five years out. I don’t see any kind of exit in the short term.

RL: Why not?

ME: Because I think I’ve got a lot more to achieve. I think I’d be underselling myself. Maybe it’s a little ego or maybe it’s real. Also, I’m a little afraid to work for someone else and I’m a little afraid of not doing anything at all. Actually, I’m a lot afraid of that. Hey, I’m young.

Philanthropy

RL: Can you tell us about your philanthropy initiatives?

ME: I’ve got one organization called SEE, Sweat Equity Enterprises. It is a design education curriculum program for underserved kids. We take in a new batch of ninth graders every year. It’s amazing to see that three or four weeks of Photoshop or Illustrator [design software] classes changes the kids’ perceptions of what they could do with their doodling.

The other organization we have is Tikva Children’s Home in Odessa, Ukraine. My partner, Seth [Gerszberg], found the orphanage on a trip to Russia about seven or eight years ago. This orphanage was being run so badly, and these kids were just all over the streets. We could see what it could become. Tikva means “hope” in Hebrew. I think it was probably the first hostile takeover of an orphanage in history. Now we’ve got almost 400 kids in the program. Being in the philanthropy business is messy, man. In business, there’s no room for emotions. In philanthropy, you got to tolerate emotions, so it’s heavy stuff.

Pop Culture Enthusiasm

RL: Why did you buy Barry Bonds’s recordbreaking baseball?

ME: I bought the baseball because it was a great pop culture moment. People have really strong opinions about that ball. During Barry’s race up to breaking Hank Aaron’s record, you just felt a feverish tone. It is a rich debate that is loaded with so much meaning. And just like America, baseball has a lot of ugly bits and pretty bits and bits that you begrudge and bits that you hold up on a pedestal. It’s not perfect. And I thought that that was something really kind of cool to engage in. It would be in the spirit of watching American Idol.

It’s not the first pop culture [object that I’ve purchased], although it was probably the larger scale in terms of the transaction. I own Yoda. A lot of people don’t know that, but I got the original Yoda sculpture and model that they built all the casts off of.

RL: What does that have to do with Marc Ecko?

ME: It shows people the way I think. Maybe it’s a little bit of the P.T. Barnum in me. Maybe it’s the populist in me. Maybe it’s the narcissist. Maybe it’s all those things.

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Mayor Bloomberg and Latin Media and Entertainment Commission Announce New Efforts to Position New York City as the Center for Latin Media and Entertainment New LMEC Projects to Include Media Events Guide, Revamped Website, and New Partnership Between the New Media and Advertising Industry and Educational Institutions Across the City

NEW YORK, May 13 /PRNewswire/ -- Mayor Michael R. Bloomberg will announce today at the annual "Made in NY" Awards reception held at Gracie Mansion new efforts of the Latin Media and Entertainment Commission (LMEC) to position New York as the center for Latin media and entertainment. The announcements include the City's first ever Latin Media Guide of events taking place throughout the city, the appointment of eight new commission members, the formation of a working group with educational institutions and industry leaders, and a newly re-launched website on www.nyc.gov .

"The Latin Media and Entertainment Commission was established to showcase our city's Latino arts and entertainment community and create new opportunities and jobs in these fields," said Mayor Bloomberg. "The Commission has brought together executives from Latin media and business organizations, and over the past four years these leaders have put their talents to work on the city's behalf. By welcoming eight new members and launching a new website and Latin media guide, the Commission is strengthening the art, music, and entertainment industries that make New York City the Latin Media and Entertainment Capital of the World."

As part of the Commission's efforts to create and support events that provide the most enriching Latin cultural experiences, the LMEC has partnered with the bilingual Latino website NYRemezcla to create the first-ever Latin Media Guide. The 2008 edition of the guide includes 14 events supported by LMEC. These events range from Latin film screenings to outdoor Latin music concerts and combined are expected to have an estimated economic impact on the city of over $60 million.

"We continue to work closely with the Mayor to identify, build, and tout top destinations in New York City featuring Latin advertising, new media, films, music, dining, art galleries, and more," said LMEC Chair Mario L. Baeza, Chairman and CEO of the Baeza Group, and Founder and Executive Chairman V-Me Media, Inc. "We are committed to fostering the growth of Latin organizations in New York in order to continue growing and enriching the cultural fabric of our great City."

This year, LMEC's goal to promote economic development for Hispanic advertising and media companies will be re-enforced by the addition of eight new board members: Patrick Dolan, Senior Vice President, Interactive Advertising Bureau; Robert Federico, Executive Director, Repertorio Espanol; Angela M. Freyre, Senior Vice President, Nielsen Media; Jacqueline Hernandez, COO, Telemundo; Jorge Reynardus, President/Partner, Reynardus & Moya; Jeffrey Thompson, Vice President Global Diversity, Disney; Joe Uva, CEO, Univision; Carlos Sanchez, President & General Manager of Telemundo 47.

The event listings in the Latin Media Guide are also part of a comprehensive calendar featured on the LMEC's newly redesigned website that can be found on www.nyc.gov . Some of the up-coming LMEC-endorsed events appearing in the new Latin Media Guide include TeatroStageFest being held June 2-15, the Latin Alternative Music Conference being held July 8-12, the New York International Latino Film Festival taking place July 22-27, the Latino Cultural Festival at the Queens Theater July 23-August 3 and the New York Salsa Congress August 27-31.

The new LMEC website will also include a summary of New York business incentives, an Online Business Survey, a directory of industry and Latino cultural institutions and subscription to a newsletter that will keep the public updated and informed about the LMEC's work and upcoming Latin events. The website will also highlight the LMEC's joint effort with many of the City's top colleges and universities and executives in the "new media" and Hispanic advertising fields to develop and strengthen New York City's growing Latin media and entertainment workforce. The partnership seeks to bridge the gap between educational institutions and the changing demands of the industry to provide opportunities to students.

About the Latin Media and Entertainment Commission (LMEC)

On October 28, 2003, Mayor Michael R. Bloomberg created the NYC Latin Media & Entertainment Commission (LMEC) by Executive Order No. 43. The LMEC advises the Mayor on business development and retention strategies for the Latin media and entertainment industry and works with City agencies to pursue the LMEC's goals. Through research and strategies, the LMEC develops initiatives to retain, recruit, and expand New York City's Latin media and entertainment productions, businesses, and jobs as well as to attract and host high-profile Latin entertainment productions and events in New York City. The Commission is made up of leaders from the Latin and mainstream media industry, community leaders from the nonprofit and cultural sectors, and leading executives from the financial, advertising, and real estate sectors. Commission members include honorary Chairpersons Jennifer Lopez and Robert De Niro; LMEC Chairman Mario Baeza, Chairman and CEO of the Baeza Group and Founder and Executive Chairman V-Me Media, Inc.; and the Mayor's Advisor and Liaison to the Commission, Willie Colon. The heads of seven City agencies, under the direction of the Deputy Mayor for Economic Development, serve on the commission as ex officio members.

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Heavy, Break Lay Off Staff As Competitors Targeting Young Men Proliferate

By Michael Learmonth

Published: November 03, 2008

NEW YORK (AdAge.com) -- One could say that the once-dominant lad-magazine category, epitomized by Maxim, was felled by a swift kick to the groin. Gone are many of the glossies (Stuff, FHM) that once dominated the market, replaced by dozens of websites purveying stupid videos of, well, anything that might get forwarded around by a guy to his pals.

But now, after several years of growth, the lad sites are starting to shield their own loins. Heavy, which runs a video site and an ad network, cut 20 staff members earlier this month, and Chief Marketing Officer Eric Hadley left last week. ManiaTV and Ripe TV, which create branded content for men, cut 20 jobs. Break, which has amassed a large audience for amateur and semipro video of groin shots and skating accidents, also laid off staff from underperforming spinoff sites.

The problem: While there is still a robust group of young males trolling the net, they are a lot more fragmented and harder for advertisers to reach. There is a huge proliferation of sites trying to reach them, leading to cutthroat competition. And there's a general tightening of online ad dollars. All three factors combined threaten to hit the lad sites where they live.

"Everyone is expecting the market to get a little bit tighter; you want to give yourself some room in anticipation of that," said Heavy co-CEO Simon Assaad. "Everyone is going to have to do a better job in the next 12 to 18 months if you're going to stick around."

Next year could be a tough one for online publishers, meaning the gold rush of the past five years could turn into more of a scramble for available ad dollars. No market will be more competitive than the men 18 to 34. The sector already includes dozens of well-funded players such Break, IAC's CollegeHumor, News Corp.'s AskMen.com, Maxim.com, Ripe TV and AOL's Asylum, not to mention YouTube and MySpace, which dwarf them all.

Little Brash

At the same time, the category just got another well-funded competitor in Glam Media's Brash.com, a sparse website attached to a big ad network sold by Glam's formidable sales staff, which has established a significant presence in the online women's market.

The good news for these sites is that young males spend a large and growing portion of their time online and spend less time watching TV than women in the same demo, according to Nielsen. The challenge is that they're one of the most fragmented audiences sought by advertisers, forcing marketers to split a static pie of dollars among an increasing number of outlets.

Five years ago a typical media plan targeted to young males might have 10 outlets, dominated by TV networks and a few magazines. "Today, you still have some of those TV outlets and a few magazines, but you also have 10 to 15 digital outlets, and while current ones continue to grow, more keep popping up," said Andrea Kerr Redniss, managing director-digital at Optimedia.

The sites are already feeling signs of softness in the fourth quarter, typically a crucial one for the genre, which relies on spending from movie studios, consumer electronics, automotive, video-game publishers and console makers. The automotive category is struggling. Movie studios have maintained spending but are more likely to spend on one site, rather than spread the dollars around as they have in recent years. Given the economy and the fact that such niche sites are sometimes considered experimental buys, package goods are pulling back. Players such as Axe and Frito-Lay have significantly cut spending this year.

"What we are seeing is [consumer package goods] are slower to come to market, and when they do make the commitments they have been scaling back," said James Green, CEO of Giant Realm, an ad network that targets young men on gaming and tech sites. "Some are canceling buys completely."

Following the money

Helping drive the proliferation of sites and ad networks targeting young men has been the shift of ad dollars trying to reach the demo online. In 2003, Gillette, for example, spent less than 1% of its ad budget online, according to TNS; in 2007, online received 8%. Unilever's Axe, the golden goose of the category and one of Heavy's biggest advertisers, spent $5 million online in 2007, but only $1 million in the first half of 2008, according to TNS Media Intelligence. Frito-Lay, another big spender in the space, cut spending due to crippling fuel costs for its truck fleet.

Mobile operators remained big spenders but, like the studios, are consolidating their spending on fewer sites. "The dollar amounts haven't changed; there are just many more vendors to talk about. There's more strategy, more tactics," said Paul Leys, director-West Coast innovations at Initiative. "The destinations may not be big, but you're hitting the demo spot-on."

To get a sense of how fragmented the market is, consider that once-dominant brand Maxim is a virtual peon compared with its web-only competitors. Compete estimates 344,382 people visited Maxim.com in September, compared with around 2 million for Heavy, 3 million for Break, 1.2 million for CollegeHumor and 1.3 million for Asylum, not yet a year old.

"It's clear young men are spending more time online, but they're harder to reach," said Bill Wilson, exec VP-programming at AOL. Men 18 to 34 visited slightly more web pages (2,353 vs. 2,305) than women during the month of August and watched 63% more videos than women, according to Nielsen.

Better than sex?

Break commissioned a national poll in which 69% of men said they couldn't live without the internet vs. 31% who said the same about TV. Amazingly, 24% chose surfing the web over sex. "Even in a recession, if you want to be in one demo, this is the one," said Break CEO Keith Richman.

The question is whether the market can support the sheer number of outlets or if a year of slow-to-no-growth means the market might be as glutted with publishers as the lad-magazine genre was earlier in the decade. "We could do nothing but meet with [online] publishers 24/7 and still not meet with everyone," said Optimedia's Ms. Redniss.

"There certainly is caution in the marketplace," said CollegeHumor President Josh Abramson. "It makes it that much harder for people in our space that are not on the same level of must-buy as old media."

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Digital Outlets Like Hulu, Joost and Veoh Obliged to Show Commercials

By Michael Learmonth

Published: November 03, 2008

NEW YORK (AdAge.com) -- With DVR penetration knocking on 30%, much of America now views the ability to skip ads on TV as something approaching a birthright.

While they haven't had much choice in the matter, the broadcast networks say they're OK with this, that DVR users watch more TV and disproportionately more shows from ABC, NBC, Fox and CBS, which can't be bad, right?

But the networks haven't given up on the dream of a world of must-see advertising and are quietly attempting to take back that right -- let's call it a privilege -- on the next generation of digital platforms. Already, the networks have effectively eliminated ad-skipping on broadband and have made that a prerequisite in deals with online distributors such as Hulu, Joost and Veoh, as well as ABC.com's full-episode player.

ABC is even trying to export the model offline with its latest video-on-demand agreements with Cox Communications and Verizon's Fios, which allow next-day, on-demand access to shows -- with fast-forwarding disabled for the ads. More ABC VOD deals are in the offing, and the network says they'll all be ad-skip-free.

"It's curious and very counter to the way consumers are accessing television programming," said Tim Hanlon, managing director of Publicis' VivaKi Ventures unit. "From a consumer perspective, it seems antithetical."

'What, we care?'
Yet so far, consumers don't seem to be bothered, in part because the networks have also dramatically reduced the number of ads both online and, in ABC's case, VOD. Hulu served 142 million videos in September, mostly from NBC, Fox and Viacom, all with advertising that could not be skipped. Analytics start-up Integrated Media Measurement estimated that 20% of Americans watch some prime-time shows over broadband, and none of them are skipping the ads.

The networks are spending millions on research to make two arguments: Online-video ads have a bigger impact than TV ads and therefore deserve higher ad rates than TV, and that consumers don't mind the intrusion. Both ABC and CBS commissioned research from Magid Associates that shows consumer recall of an unskippable ad online is 50% compared with 18% for an unskippable ad on broadcast TV.

The networks are, in effect, attempting to put the toothpaste back in the tube on ad skipping in a bid to reinvent their own business model. Part of this bargain, at least initially, is living with fewer ads, but that could change as the networks look to bring the average revenue per viewer in line with broadcast TV. "The ad model is going to evolve, and we will see how many ads the consumer is willing to accept. I don't believe those boundaries have been pushed yet," said ABC President-Sales Mike Shaw.

The question is whether this will result in anything more than a niche experiment, or if it's actually a template for the future of free TV.

One theory of how broadcast TV lost its way is that the networks started loading up shows with more advertising -- 20 minutes' worth in hourlong episodes of "Grey's Anatomy" and "Desperate Housewives," for example. Then technology came along that made skipping ads easier and more desirable than, say, just doing nothing.

Endangered species
Broadcast audiences have been on a steady decline since the mid-'80s. This year prime-time network TV viewing is down 2.9% at CBS, 9.7% at ABC, 14.3% at NBC and 17.5% at Fox, according to Nielsen Media Research. At the same time, the networks are getting a significant amount of viewing on DVRs -- more than 4 million viewers for "Grey's Anatomy" and 3.5 million for CBS's "CSI" during one recent week in October.

Since DVR penetration is likely to hit 50% in the next few years, the business model is looking like an endangered species, unless the networks can figure out how to insert a fresh ad into programming when it's watched after the fact.

Interestingly, cable operators could hold the key to that hurdle. Cablevision won the right in federal court to introduce a network DVR. Since the content resides on Cablevision's servers and not on a DVR hard drive, the company could, theoretically, insert a dynamic ad that would make a time-shifted viewer as valuable as a live viewer. Cablevision could also disable ad-skipping altogether, which Time Warner Cable does with its "Start Over" service, but a spokesman said the company has no intention of doing that. Doing so would give satellite TV and even Fios a competitive advantage ("We have a DVR with a working fast-forward button!").

The endgame for ABC is to offer enough shows on VOD that consumers might just decide they don't need DVRs, and can do without the $10- to $15-per-month expense. Problem solved. Consumers watch all the ads, all the time.

Rewinding history
Not so fast. That might just lead to more technologies to circumvent the ads, or to more piracy. "We've allowed people to fast-forward for the past five years -- that would be tough to take away," said Jen Soch, VP-advanced TV at MediaVest.

What's more, to preserve broadcast's economic model, ABC and everyone else will ultimately have to load up those shows with as many ads as broadcast TV. Online ad rates have been higher than those for TV, but they'd need to be double the cost per thousand in order for a network to get away with showing half the ads, and right now, at least online, they're showing far fewer than that.

"We have to be very careful not to overstep our bounds," said Chris Allen, director-video innovations at Starcom MediaVest. "People won't accept five- or six-minute [advertising] pods you couldn't fast-forward, but three or four ads over a one-hour show -- they are fairly tolerant of it."

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Shakeout Among Publications Looks Unavoidable After Another Dismal Week

By Nat Ives

Published: November 03, 2008

NEW YORK (AdAge.com) -- The print business was horrified enough last week when The Christian Science Monitor revealed plans to fold its 100-year-old daily print edition in favor of the web and a weekly print product. But by the end of one of the worst weeks in the history of newspapers and magazines, the Monitor was starting to look like one of the few places publishing could turn for even a dim ray of hope.

With Time Inc. announcing layoffs ranging from 300 to 700 positions; Gannett promising to lay off 10% of its local-newspaper staffers; Condé Nast cutting Men's Vogue down to a biannual and paring Portfolio and its website; and even Radar shutting its doors again, turning its Halloween party into a good-bye party, it was a week that needed that title's gallows humor just to get publishing types through it.

Clearly, the changes to publishing's business model aren't going away, so publishers are going to have to adapt to a new reality. As Time Inc. Chairman-CEO Ann Moore said in a speech last week, "If you're sitting on your five-year plan, you're delusional." But just what should publishers be planning for?

The best-case scenario now facing print publishers is that the events of last week will eventually be revealed to be mainly the product of a familiar economic cycle, a temporary downturn that exacerbated the trends already challenging print media. After the economy recovers, probably by the end of 2009, advertisers will regain their interest in print as well as their ability to buy space there.

In this rosy but still grim scenario, the blows landing left and right these days will drive weaker players out of business in the meantime. Magazines' most vulnerable categories, such as shelter books and entertainment weeklies, will see second-tier titles fold. Even the survivors will unleash frightening bloodletting along the way (think Condé Nast and its 5% budget cut across its magazines announced last week, as well as its suspension of its lavish "Fashion Rocks" and "Movies Rock" marketing programs for 2009).

Good environment for survivors
When the economy returns to good health, the print publications that remain will enjoy expanded market share, as fashion and luxury advertisers especially revel in showing off their beautifully photographed products in lushly designed titles. (Magazines have seen a decline in ad revenue of only 1.8% so far this year, thanks largely to upscale marketers.) Newsstands won't be so crowded. Dominant magazines won't be undercut by so many challengers offering lower rates.

In the worst-case scenario, however, advertisers won't come back. The downturn will drive them into the arms of efficient electronic media that can better demonstrate a higher return on investment. Auto looks likely to behave that way. Marketers will get the hang of building friendly social networks and advocates around their brands, undermining their interest in the trusted brands of newspapers and magazines.

The hemorrhaging of jobs will scare the print industry's top talent into other businesses entirely. The focal points of culture and commerce will swing further from faded institutions such as newspapers and magazines. The print products that continue will rely on smaller audiences than ever.

The one thing certain today is that 2009 will look and feel a lot like last week.

"In some ways the Monitor is lucky that it can take a bold step right now," said Bob Hanna, advertising director at the paper. It's true: The Monitor can ditch daily print because it doesn't get much revenue there.

Not for everyone
Your local daily can't afford to do the same; nearly all of its revenue comes from the print edition. So even though newspapers' print ad revenue declined 7.4% in the first half of this year, most newspapers are in no position to cut themselves free from print and its rising costs. The web doesn't seem poised to save them either. Tribune Co., Lee Enterprises and E.W. Scripps all reported actual declines in web advertising during the second quarter. Mark Potts, the consultant and media blogger, estimated that newspapers' online revenue won't surpass their print ad revenue until 2018.

"We're getting these kind of 'Come to Jesus' moments for newspapers," Mr. Potts said. "I suspect we will see much more in the next few months. Anecdotally, internally what I'm hearing is, 'Oh my god, we thought it was bad before.'"

Portfolio, for its part, is pulling back from producing web-only content and doubling down on its print edition. With a staff of about 50 before last week's layoffs, its website bore costs too heavy to support. So it hit "reset," turning into little more than a print companion that will also aggregate other outlets' content. That makes the Portfolio website a lot less interesting, particularly to publishers trying to find their way to real businesses online.

That group, if it wasn't clear by last week, should now include just about everyone.

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Spending for First Eights Months Down 1.3% -- and It Would Be Worse Without Olympics, Campaign Spending

By Nat Ives

Published: November 03, 2008

NEW YORK (AdAge.com) -- This is shaping up to be the first even-numbered year to post a decline in broadcast TV spending since 1970 -- in fact, it's tracking to end up even lower. And that's before you strip out the big boost to media provided by the presidential primaries, the general election, the down-ticket races and all kinds of referenda.

Media ad spending from January to August across all media slipped 1.3%. Without the political spending, that falls further to 1.6% -- a difference of $331 million. Without campaign spending or the summer Olympics (another booster of even-year ad spending), overall ad spending from January through August would have declined a full 2.4% to $89.4 billion, according to Ad Age estimates. And once political-spending data are available for September and October, when 70% to 80% of campaign outlays occur, that gap will yawn into a chasm.

That's despite the fact that total political spending on all media is expected to top $2.5 billion, with the presidential campaign alone exceeding $750 million, according to estimates from the Campaign Media Analysis Group at TNS Media Intelligence.

Nowhere is the effect of the election greater than in local broadcast TV. Campaign spending is such a staple that TV-station operators view their business in two-year cycles, with odd-numbered years expected to be lean and even-numbered years like this one expected to be fat.

Even with political spending and the Olympics, this year will probably see a decline for broadcast TV worse than 1970's 1.5% drop, according to the Television Bureau of Advertising.

'Disappointing' growth
"I've been somewhat disappointed in it because we haven't seen the growth rates that we traditionally see," said Jack Poor, the industry association's VP-marketing. "You know: exponential growth from week to week. It's been steady growth, obviously, but it's been disappointing."

Campaign revenue is good for TV stations operating in battleground markets, but even there, conditions aren't as tight as they could be, according to John Hendricks, exec VP-sales for Tribune broadcasting and interactive. One sign: Inventory isn't tight enough to force nonpolitical spots off the air in favor of political commercials. That was a big problem in 2006, but not now.

"The automotive industry, telecom and retail are three very big categories that have been softer than anticipated in 2008, really because of the downturn in the economy," Mr. Hendricks said. "In a typical year, when the underlying business is strong, you end up pre-empting some of your regular customers. This year, because the traditional business is not as strong, you're seeing less pre-emptions."

Hearst-Argyle Television said last week that third-quarter revenue had matched the third quarter of last year. But without political advertising, the quarter would have shown an 11.5% decline in ad sales, which it attributed to the impact of a weak economy on its largest advertising categories.

Outlook cloudy
Gannett's recent third-quarter results showed a 3.9% increase for the broadcasting division over the third quarter of 2007. But without its $26 million in political advertising, the third quarter of 2008 would have come in 9.8% short of third-quarter 2007.

Political advertising is coming in about as expected, said Doug Lowe, exec VP of the Meredith Broadcasting Group. Without it, the third quarter would have seen declines of a percentage in the mid-teens, he said.

As for the other part of broadcasters' business, for "anybody who's in the business," Mr. Lowe said, "this is the worst they've ever seen."

The presidential race has been a big boon to radio, particularly in recent weeks. During the week of Oct. 13, the Obama campaign was the sixth-biggest-spending advertiser, airing 17,813 spots in one week, according to Media Monitors. (The McCain campaign, by comparison, didn't even crack the top 100.)

Bob McCurdy, president of Clear Channel Radio sales, said the Obama campaign has outspent the McCain campaign on radio by a ratio of 4.5-to-1, particularly in battleground states such as Ohio, Florida, North Carolina, Colorado, Wisconsin and Pennsylvania. Political ad spending across Clear Channel Radio's stations was up between 50% and 60% from the 2004 elections.

But the outlook after Nov. 4 is cloudy at best. "I don't know initially if anything is going to replace the political dollars," Mr. McCurdy said. "The radio industry is really focusing on becoming a lot more creative in our solutions for addressing marketing needs. We're aggressively pursuing categories that hadn't used the medium before and going in with ideas that we believe will work to resolve those marketing issues."

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Marketers Increasingly Bypass Traditional Business Model

by Jack Neff

BATAVIA, Ohio (AdAge.com) -- When Procter & Gamble Co. brought hundreds of suppliers to Cincinnati earlier this month for its first "supplier summit," among them were 40 media companies. The message from Chairman-CEO A.G. Lafley, according to one attendee: "We want your ideas, and if we use them, we'll give you a piece of the action."

It should be no surprise that media companies are among the partners P&G is looking to tap for ideas that range from new products to new ways of marketing them. Though it may be the largest, it's far from the only marketer soliciting marketing advice from media companies these days.

Companies such as Johnson & Johnson, Kimberly-Clark Corp., Clorox Co., Hewlett-Packard and Verizon also have enlisted media companies lately not just as conduits to reach consumers but also as co-creators of programs to do so. And they sometimes bypass their usual media and creative agencies in the process.

The specter of media companies taking on a new role as strategic partners alongside -- or perhaps even ahead of -- agencies came into clear focus last month during a CMO Roundtable at the Association of National Advertisers annual conference in Orlando, Fla., when chief marketing officers vented some of their displeasure with shops and acknowledged the growing role by media companies.

"If I were an agency, I would be really worried about being disintermediated," said Becky Saeger, CMO of Charles Schwab and new chairman of the ANA. "More and more, agencies are almost in the way sometimes."

Working with established players
"We're going to pilot a number of different relationships where we go direct with media companies," said Gary Elliott, VP-corporate marketing of Hewlett-Packard. He pointed to Meredith Corp. and Time Warner as media companies HP wants to work with directly "because they have relationships with customers and can build that quickly and immediately and give us feedback."

Given the turmoil facing media and marketers, he said, "I think you're seeing media companies, just like marketers, trying to figure out what they need to do, what services they need to offer, how they can offer it efficiently."

Indeed, John Harrobin, senior VP-marketing and digital media for Verizon Communications, said such relationships are becoming the rule rather than the exception for top advertisers.

It's not always about pushing media or creative agencies aside, but more marketers definitely see the advantage of using media companies as more than just aggregators of eyeballs. For example, Kimberly-Clark held a get-together with its media agency, WPP Group's Mindshare, and media companies more than two years ago, yielding ideas that included stitching Viva paper towels into Reader's Digest as a novel way of sampling the product directly.

Tapping consumers
While Clorox Co. relied on Omnicom Group's DDB Worldwide, San Francisco, to handle most of the launch activities around its introduction of Green Works cleaning products earlier this year, it leaned on Meredith's Better Homes and Gardens to help target influencers who were willing to hold house parties to promote the brand.

Clorox already knew from its research and early feedback that many consumers wanted to talk about the new product line, said Jessica Buttimer, marketing director for the brand. And Meredith has a turnkey approach in the form of the house parties that allowed them to do so. She credited that work in part for positive comments that have come in at a rate 10 times higher than for a typical company product launch.

But there doesn't seem to be any real danger, at least at P&G, that media companies will supplant ad agencies. "I'd be shocked," said an executive with a P&G media shop. "It's very outside their culture." He said he expects media shops to be involved in any ultimate dealings between P&G and media companies, though he doesn't discount the possibility of media companies doing some work that creative or digital agencies have done in the past.

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By BROOKS BARNES

THE most expensive piece of clothing sold by the Walt Disney Company six years ago was a $75 sweatshirt embossed with a mug shot of Mickey Mouse. By Magic Kingdom decree, home furnishings were required to exhibit at least one Disney character, leading to children’s play rugs ($65, in Pluto) and nightlights ($9.95, in Winnie the Pooh).

Disney still peddles all those things. But now the company also sells $3,900 designer wedding gowns — no characters in sight — and women’s cashmere sweaters “inspired by Tinker Bell.” Interior design offerings include $2,800 leather club chairs and $6,000 chandeliers patterned after the Art Deco décor in Mr. Disney’s former office. One of the company’s new products: couture soap.

Welcome to Disney, the “lifestyle brand.”

Shoppers may be surprised to learn that these pricey and Mickey-free products are from the same company that foisted “Hannah Montana” on the world and turned singing Chihuahuas into a cultural touchstone. While some of the items have recognizable characters on them, others contain only winks and nods to the company’s animated movies and theme park rides. And sometimes the only hint of Disney’s involvement is on the label.

Lindsay Bern, a makeup artist for Smashbox Cosmetics, was so delighted with a lavender and silver tote bag that she received as a gift from a friend that she started using it immediately. Then, while on an airplane, a flight attendant commented on her “Alice in Wonderland” bag. “I thought she was crazy until I started looking at it more closely, and, sure enough, there was a subtle Alice hiding in the design,” Ms. Bern said.

The Disney brand, of course, is one of the most powerful in the world. It connotes quality and creativity, but also carries a strong whiff of mass culture — which can turn the noses of fashionistas skyward. It is difficult for many upscale customers and boutiques to take Disney seriously. Of her bag, Ms. Bern said, “I’ll admit it: I liked it better when I didn’t know it was from Disney.”

But Disney has been working hard to improve its image. Starting in 2002, the company tiptoed into high-end retail, seeking out partnerships with designers like Paul Smith, Vivienne Tam and Dolce & Gabbana, who created a $1,400 sequined Mickey Mouse T-shirt. Andy Mooney, chairman of Disney Consumer Products, thought that a smattering of designer clothes featuring Disney characters in fresh ways would gain the attention of fashion-forward shoppers. The goal was to stretch the brand a bit while adding buzz.

Now Mr. Mooney is going further, asking people to think of Disney as a brand of luxury clothing, expensive home furnishings and hip jewelry. Lest anyone be confused, the company has created labels to differentiate the new merchandise from what it sells at Disney Stores and theme parks. The “upscale, high-glam” Disney Couture is primarily for women, while guys have Bloc28, a name that refers to Mickey Mouse’s debut in 1928. The labels, featured in fashion magazines like Vogue and worn by celebrities like Rihanna, are sold only in boutiques and in department stores like Bloomingdale’s and Neiman Marcus.

From a business perspective, the full-speed push into “noncharacter products” like dining tables and executive fountain pens is a crucial way for Disney to expand its consumer products unit, which is better known for pumping out Power Rangers pajamas and Daisy Duck key chains. Disney says that sales of its home and lifestyle products will total about $85 million in the next 12 months, making up one percent of the consumer unit’s revenue. Within five years, the company projects the category will deliver $500 million in sales a year.

It is an ambitious plan for a company whose idea of fashion for decades was to attach plastic mouse ears to a beanie. Analysts who follow Disney said the company’s strategy is smart, though the recent downturn in consumer spending may make it difficult to meet those aggressive sales goals, and some consumers have noticed a similarity between Disney Couture and Juicy Couture.

Over time, consumers from all quarters are likely to grow familiar with the new designs. In one deal that has yet to be announced, Wal-Mart has hired Disney to take over its children’s bedding department this spring. Disney will supply its normal range of “Cars” pillowcases and “Cinderella” sheets, but it will also create four lines of bedding that include no images of Disney characters.

In September, Disney introduced a collection of patio furniture in partnership with Agio. Starting in the spring, consumers will be able to decorate their backyards with outdoor dining sets from the Animal Kingdom Collection. Or they can opt for a martini bar and swivel bar stools from the Grand Floridian Collection — a respite, perhaps, for parents after one too many viewings of “Toy Story 2” on DVD.

Other new products this fall include $1,200 fountain pens from Monteverde that come in three designs. In the Sleeping Beauty Collection, for example, subtle silver arches around the cap are modeled after the window architecture on the Sleeping Beauty Castle at Disneyland. The nib is 14-karat gold (of course).

Coming soon: Disney dresses from the Los Angeles designer Sue Wong; they will play off the colors in “Fantasia”

“This is more about feeling the Disney characters than seeing their image,” said Kidada Jones, the former Tommy Hilfiger model (and daughter of Quincy Jones), who teamed with Disney to produce a line of jewelry and accessories. One of Ms. Jones’s top sellers is a $143 bracelet made from braided turquoise leather and marketed as an “Alice in Wonderland”-inspired design. The gold-plated charms that dangle from it are references to the story: a pocket watch, hearts, signs that say “Eat Me” and “Drink Me.”

Donna Sheridan, vice president and general manager of Disney Consumer Products, said the company wants people to think of Disney as more of a J. Crew than a family fun factory. “I want to have pieces that adults, designers and tastemakers can all wear and put into their homes.”

The sense that Disney’s new fashions could blend with a woman’s everyday wardrobe is what sold Bloomingdale’s on them.

“We were interested because none of these pieces look like tourist items,” said Denise Ramirez, a divisional merchandise manager at Bloomingdale’s in New York City. “They are clothes you would wear, not something you pick up at a theme park because it’s cute for the day.”

Paul Devine, an interior designer based in Pasadena, Calif., said he was surprised by Disney’s furniture line, which is produced with Drexel Heritage. The collection started with 12 pieces in 2006 and quickly expanded to 50 the following spring.

“I’m a stickler for quality, and I had reservations that this would be up to my standards,” Mr. Devine said. After much scrutiny, he decided to add a few Disney furniture items to a home he was designing in Palm Springs, Calif., and he has been a customer ever since. “There’s even some sex appeal at work there,” he said.

As the company presses forward, it is encountering competition from inside the movie capital. Warner Brothers, also chasing the brand halo that can come from partnerships with top-notch designers, just landed a deal with Diane von Furstenberg. Warner, home to Looney Tunes and DC Comics, teamed with Ms. von Furstenberg on a series of $695 ready-to-wear dresses inspired by Wonder Woman.

To attract artists and designers, Disney has played much looser with its characters than ever, a move that has been controversial within the company. A T-shirt sold at Fred Segal Fun in Santa Monica, Calif., showed Mickey Mouse looking like a pimp, with a gold-studded chain and a fedora. An upcoming jewelry offering from Disney’s fashion collection for young men is a ring that depicts a rabid-looking Mickey Mouse with freakish long fangs.

Pam Lifford, executive vice president of Disney Consumer Products, defended the provocative images. “We take it to the edge but keep it controlled and maintained,” she said. “Allowing designers and artists the freedom to take our creative assets and explore, within reason, is the only way we can attract the right talent.”

Designers say they have been impressed with the willingness of the famously guarded company to take chances. Charlotte Tarantola, a Los Angeles designer, said she decided to do a limited collection based on “Snow White and the Seven Dwarfs” in part because Disney allowed her to explore “the darker, very adult side of the fairy tale.”

As the proprietor of a small company, Ms. Tarantola was eager to piggyback on the Disney name. “Anyone who is alive today has been touched by Disney in some way. If becoming partners with them can help my business, far out.”

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Source: Survey of 500 Latinos commissioned by Jack Morton

Word-of-Mouth, TV Much More Effective Than Print, Survey Finds
By Laurel Wentz

Published: November 03, 2008

NEW YORK (AdAge.com) -- Experiential marketing is the medium most likely to persuade Hispanic consumers to buy a product, according to a recent survey commissioned by experiential-marketing company Jack Morton Latino, but respondents had strong opinions about how events should be organized.

Respondents said they shun a hard sell, with people representing the sponsor brand and expect a live event to be complemented by social networking, blogs and mobile-phone activities.

The online survey of 500 respondents focused on acculturated Hispanics, typically U.S.-born and bilingual. Of those surveyed, 39% said they had participated in a live brand experience in the last year. Asked which medium would be mostly likely to drive their purchase of a product, respondents ranked experiential media first (30%); followed by word-of-mouth (24%); TV (23%); and the internet (14%). Print media, direct mail and radio all got responses of 4% or less.

Word-of-mouth is especially important in the Hispanic market; 68% of survey respondents said they interact with between three and 10 family members weekly.

Just 2% of respondents said they preferred hard-sell "active interaction" with people representing the brand; most preferred a softer sell and a more passive message at an event, conveyed through signage or video presentations. The main technologies respondents expected live events to be linked to were social-networking sites and blogs (25%) and mobile phones (18%).

Isabel Villegas, senior Latino-market specialist at Jack Morton Latino, said the live-concert series the agency created for client Alltel in key Hispanic markets in the Southwest also involves Facebook and MySpace pages, as well as pictures taken of attendees at the concerts to be put on "find yourself" screens during the events and posted later.

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At ANA Gathering, Marketing Pros and Agency Bigs Tap Barack Over Apple, Zappos
By Matthew Creamer

Published: October 17, 2008

ORLANDO, Fla. (AdAge.com) -- Just weeks before he demonstrates whether his campaign's blend of grass-roots appeal and big media-budget know-how has converted the American electorate, Sen. Barack Obama has shown he's already won over the nation's brand builders. He's been named Advertising Age's marketer of the year for 2008.

Mr. Obama won the vote of hundreds of marketers, agency heads and marketing-services vendors gathered here at the Association of National Advertisers' annual conference. He edged out runners-up Apple and Zappos.com. The rest of the shortlist, selected by Ad Age's editorial staff, was rounded out by megabrand Nike, turnaround story Coors and Mr. Obama's rival, Sen. John McCain.

From unknown to presidential nominee
"I think he did a great job of going from a relative unknown to a household name to being a candidate for president," said Linda Clarizio, president of AOL's Platform A, the sponsor of the opening-night dinner attended by 750 where the votes were cast.

"I honestly look at [Obama's] campaign and I look at it as something that we can all learn from as marketers," said Angus Macaulay, VP-Rodale marketing solutions "To see what he's done, to be able to create a social network and do it in a way where it's created the tools to let people get engaged very easily. It's very easy for people to participate."

Jon Fine, marketing and media columnist for BusinessWeek, pointed to Mr. Obama's facility with engaging voters in social-media channels. "It's the fuckin' Web 2.0 thing," he said.

In introducing the winner to the crowd, Ad Age Editor Jonah Bloom joked, "I'm surprised. I thought you [all] made more than $250,000."

While Mr. Obama may have won the most votes, he didn't get them from several of the bigger marketers in the room, many of whom supported Apple, Coors and Nike instead. Procter & Gamble Co. had a split ticket. Outgoing Global Marketing Officer Jim Stengel, currently on special assignment as he prepares to leave the company at the end of the month, voted for Apple.

Apple's 'amazing consistency'
"Year in and year out, Apple delivers great innovation, customer service and user experience," Mr. Stengel said. "It has amazing consistency." His successor, Marc Pritchard, was a Nike supporter because of its development of a global community of users. "I think [the concept] is going to be huge," he said.

Brian Perkins, corporate VP-corporate affairs of Johnson & Johnson, also backed Apple, though Nike was a close second for him. "I admire all of the work they do, the clarity and consistency of their message, their design and everything they do," he said of Apple. Nike likewise consistently builds its brand across everything it does, Mr. Perkins added, noting that "they don't do a lot of TV. In fact, I don't remember when was the last time I saw a Nike ad on TV."

Mark Kaline, recently appointed global media director of Kimberly-Clark Corp., voted for Coors "because they showed business results," he said. "Quite frankly, because political advertising kind of goes against a lot of what ANA stands for, I don't think it belongs in the voting. ... A lot of political advertising is false and misleading, and marketers at this conference don't expect to see that kind of stuff."

Coors' 'new approaches'
Nancy Abraham, assistant VP-integrated marketing communications for Allstate Insurance Co., likewise backed Coors. "They've done an excellent job taking some new approaches in a market that hasn't seen a lot of growth over the years."


How they voted
Marketer % of votes
Obama 36.1%
Apple 27.3%
Zappos 14.1%
Nike 9.4%
Coors 8.7%
McCain 4.5%
Source: Meridia ARS

While Apple's strong second-place showing in the voting surprised no one, lesser-known Zappos' third-place finish probably caught a few off guard. But the online shoe seller is a sexy story because of its practice of pumping the budget it would spend on advertising into its customer service, leading to strong retention.

"Zappos has great customer service, a great business model and it's smart to use the internet as a platform," said Maria Luisa Francoli, CEO of Havas' media agency MPG. "And I love the name."

~ ~ ~
Contributing: Jack Neff, Natalie Zmuda

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by: Burt Helm

This morning when I blogged about the “Wassup 2008” Obama video, two questions sprung to my mind. First, who paid for this thing? The production values are very high – one person from Budweiser’s ad agency, DDB, estimated it could have cost as much as $750,000 (she also said DDB had nothing to do with the video). Second, how could Budweiser possibly be cool with such a clearly partisan advertisement?

After some digging, I found out. First, it cost way less than $750k. Second, Budweiser had no clue it was happening until after the video hit YouTube on Friday.

The man with the answers? Charles Stone III, the director of the original “Wassup” commercial and the movie Drumline (and the guy who answers the phone in the first frame of the video). He decided to make it about two weeks ago, he told me, with a crew of about 50 volunteers (all professionals working pro bono). They put it together in 9 days.

It was all possible, Stone says, because Budweiser never owned the rights to the idea. He’d originally made it as a short film independent of the brand, and Budweiser had only leased the rights, paying a mere $37,000 for five years of use. Back then, people gave him a hard time about the low price. Now Stone, a diehard Obama supporter, says it’s more than paid off. “That I’m able to use an idea distributed by a huge company, who made a lot of money off it, so that now when I put out what I want to say, it’s recognizable, and it sparks -- that’s worth $1 million to me.”

It came together after emailing with friends about ways they could make a video supporting Obama. Once they’d settled on the concept, he got on the phone with the original cast (all friends of his, who are now actors living in New York, Philadelphia, and LA), and called up his Director of Photography from Drumline, Shane Hurlbut, who brought in his crew. He also signed up Gerard Cantor and Maurice Marible, from commercial production house Believe Media, who co-produced. They shot over two days. The war-torn Iraq setting is actually a preexisting set in Santa Clarita, CA.

After they finished, they uploaded it to YouTube with distribution company 60Frames, set up a website, wassup08.com, and sent links to everyone they knew. As of writing this, it’s been viewed almost 1.8 million times, and picked up across the blogosphere, including on BoingBoing, Daily Kos, and Huffington Post. The final price tag? About $6500 out of his own pocket, Stone says.

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September 22, 2008
By Della de Lafuente

NEW YORK Everyone knows by now that the Hispanic demo is a growing one, but how do marketers go about addressing it? Is there a dedicated team in place charged with reaching Hispanics or are all marketers in a company responsible for focusing some of their efforts on the segment? And does anyone have the equivalent of a chief Hispanic marketing officer?

Not yet, although several companies have CMOs who happen to be Hispanic. For them, the job often involves becoming part evangelist—to help make a case for Hispanic marketing—and part corporate Hispanic compass, i.e. the point person in a firm charged with maintaining the cultural integrity of language, tone and messaging.

"You're the one who's constantly out there talking up this opportunity, crusading, telling our story, getting people engaged and focused on the brand and our agents and in making the business case for why I need to keep and grow my Hispanic marketing budget," said Luisa Acosta-Franco, assistant vp-emerging marketing at Farmers Insurance and a self-described steward of the company's Hispanic and other ethnic targeted programs.
The exact number of marketers focused exclusively on the demo is unclear. One indicator: The ANA's multicultural marketing committee boasts 135 executives with Hispanic marketing duties, including many who are veteran marketers and both Hispanics and non-Hispanics.

A look at various companies uncovered Hispanic-targeted strategies as diverse as the Latino culture itself. Job titles and responsibilities vary from company to company, with a mix of Hispanics and non-Hispanics leading dedicated efforts aimed at Latinos. Read on to find out how some brands are handling the challenge:

T-Mobile's Stockdale

Mark Stockdale, director, Hispanic marketing, T-Mobile, doesn't have to make the case for more Hispanic marketing. He lets his metrics do it for him. "Companies that are unable to provide proof of performance will be unable to get sustainable attention," said Stockdale, a native of Mexico City who helped to create the Hispanic-targeted practice at T-Mobile four years ago.

T-Mobile's Hispanic effort is plotted out over a two-, four- and six year business plan, reaching across the entire organization with the Hispanic market appearing now on the company's weekly internal business reports as a key revenue channel and ad spending growing in double digits in recent years, Stockdale said.

But Stockdale's job isn't all about charts and graphs. He also seeks to tap into the needs of the market. "It's making sure that if customers want to sign a contract, receive a billing statement, interact with a payment kiosk or speak with a customer service representative in Spanish, they can," he said. Earlier this year, the company opened its fourth bilingual dedicated call center in Brownsville, Texas.

The approach worked. T-Mobile's share of the Hispanic wireless business has climbed to 21% from 17% in the past three years, the company claims.

Fox Sports' de Quesada

Fox's parent company, News Corp., doesn't have a dedicated Hispanic CMO position, but someday it might, predicted Raúl E. de Quesada, assistant gm and vp-marketing, communications and creative services, Fox Sports International.

"News Corp. is really putting a lot of weight into where they are developing the Hispanic talent," said de Quesada, a native of Camaguey, Cuba. "Once that Hispanic talent continues to move up into higher executive positions, you'll see the Hispanic [marketing] effort will go the other direction."

De Quesada appears to take the "compass" role at Fox Sports. As the head of the on-air promotions department, de Quesada said he reads nearly everything before it goes on the air and, in most cases, he also handles the English to Spanish translation of content himself, looking to preserve the integrity of the intended Spanish-language messaging while avoiding offensive language to some or all Latino cultural groups that may end up lost in translation.

That extends to new digital formats as well. Said de Quesada: "Movement of multiplatform opportunities will depend on the availability of relevant content that can deliver across the board. We're working on that because content is what really rules the marketplace."

General Mills' Rodriguez

At General Mills, Hispanic-targeted marketing is handled as a part of a wider multicultural approach that includes messaging aimed at African American consumers. The Hispanic side of the business is led by Rodolfo Rodriguez, General Mills' director-multicultural marketing.

He leads an internal team comprised of marketers and staffers in sales and consumer insights who partner with the brand teams to help support their efforts to reach Hispanics and African Americans through separate targeted programs supported by specific, dedicated dollars for each.

One of Rodriguez's projects is "Que Rica Vida," a multibrand platform in its third year aimed at Latinas and highlighting various brands and lifestyle tips via TV, a quarterly 350,000-circ. direct mail magazine featuring original content and recipes developed by the Betty Crocker kitchens; a Web portal and grass roots marketing at festivals also support.

The company has increased its investment in the program year over year, including a content partnership this year with Univision to air multiple vignettes featuring Despierta América's Karla Martínez via TV.

Launched in August, the vignettes provide tips and ideas for helping Hispanic moms navigate life in the U.S., Rodriguez said.

Western Union's Galuppo

Western Union has the unusual position of being at the center of communications between new Hispanic immigrants in the U.S. and their native countries, and Hispanics immigrating to outside the U.S.

"We're doing business with Hispanic customers all over the world, not just in the U.S. or in Canada," said Gail Galuppo, evp and CMO of Western Union's global marketing program, including Hispanic business here and abroad. "We're doing business with Hispanics in Latin America, the Caribbean, South America, even in Europe and the U.K."

As a result, the brand's approach to advertising and marketing is somewhat unusual: Western Union focuses its ad spending budget, which accounts for about 6% of the company's total revenues, in the key countries and communities where it does business or wants to build awareness of the brand. Ad budgets are managed by marketing heads in target markets in order to grow its business in key money-transfer corridors.

"You won't see us on big, mainstream TV because we're trying to reach our customers in the ethnic media and newspapers specifically targeting communities, said Galuppo. "Whether they are Guatemalans, Dominicans or Mexicans, we really get down to what type of communication they're reading."

Reliant Energy's Rodriguez

Targeted marketing is the way Reliant Energy approaches its strategy for Hispanic marketing, hiring pharmaceutical marketing veteran Manny Rodriguez in March to oversee the company's efforts, which encompass both the Hispanic and the general markets.

"Depending on the space that you play in, like us being based in Texas where in some instances Hispanics are the majority, how we go to market and how we talk to them is very important," said Rodriguez, a native of Spain who previously worked for major pharmaceutical companies in New York.

Reliant has had an ongoing Hispanic-focused marketing program for nearly a decade, devoting significant ad spend to targeting Latino consumers, said Rodriguez.

He serves as vp of brand and marketing services, essentially holding the CMO job, though it's not his title. Duties include oversight of all marketing in the general and Hispanic markets and directing advertising, public relations, market research, sports marketing and promotions among other duties.

Said Rodriguez: "To gain a position in the marketplace, it's all about understanding your core brand, your consumers and the demographics, and then investing in the marketplace, showing a presence in the community and respecting and rewarding the brand loyalty of Hispanics. Segmenting and targeting is what makes the difference."

Farmers Insurance's Acosta-Franco

Marketing to Hispanics is central to the corporate messaging program at Farmers, where Latinos are a core consumer and considered key to the company's growth strategy.

Acosta-Franco, assistant vp of emerging markets, leads that marketing, which is best known for ads featuring actor Edward James Olmos touting the benefits of insurance to the uninsured, though the company also makes a point of hiring bilingual agents.

"Ultimately, a good marketer needs to be knowledgeable and respectful of the culture to be successful," said Acosta-Franco, noting that a Spanish surname doesn't guarantee that a marketing executive will bring a personal and an industry perspective for the job.

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