BATAVIA, Ohio (AdAge.com) -- Method is probably the only package-goods company for which someone with the title of chief brand architect sets ground rules for hiring the CEO. And that someone would be Eric Ryan, the former agency planner and co-founder of the design-centric, eco-friendly brand that Jim Stengel, a former rival as global marketing officer of Procter & Gamble Co., lists among his 100 best performers of the past decade.
But the recession hasn't been entirely kind to Method. Its sales stalled at around $100 million last year. Now Mr. Ryan is out to rekindle growth and preserve the San Francisco-based company's culture, or as he puts it, "keep Method weird."
And it has been a strange year. Mr. Ryan revealed the first work from his new agency, Droga5, at the Association of National Advertisers conference in October, a viral video send-up of conventional cleaner ads showing cartoon bubbles harassing a woman in the shower. The point: You don't really know what's in your cleaners, and Congress should mandate full disclosure. The ANA crowd loved it. Some feminists hated it. Method pulled the ad within weeks.
Earlier this month, Method was back on YouTube with Mr. Ryan and co-founder Adam Lowry citing a cease-and-desist letter from Clorox Co., which contended the daisy pattern Method has used on packages for six years violated the daisy logo Clorox put on Green Works two years ago. Method tried turning the legal threat into marketing fodder via a website where people could vote on whether Method, Clorox or Mother Nature owns the daisy trademark.
Amid all the weirdness, Method has turned a bit more conventional. For its biggest launch ever, a superefficient detergent that takes only a third as much to wash a load than most competitors, it's putting $10 million in paid-media support behind the Droga5 campaign.
In an interview with Ad Age, Mr. Ryan explains how an eco-brand can benefit from what he calls the forest fire of recession, and why Method created a new marketing structure that makes brand managers more like general managers and the marketing function similar to product development and sales.
Ad Age: You guys came out with a six-times-concentrated detergent before anyone else, and you did the same thing five years ago with a three-times-concentrated version. How tough is it to be first?
Mr. Ryan: When we first launched [our three-times-concentrated detergent], there was really no consumer understanding of load count. Ultimately the entire category followed with compaction. The consumer has been trained to look at load count now, so it made it much easier to launch this time. We do refer to the product as concentrated because that's more consumer friendly, but the actual product is not concentrated. It's a really unique technology we've spent the last couple of years developing, so a very small amount is incredibly efficient. Our biggest challenge is getting trial, because once people use the pump, it's such a superior experience we know we are going to have really great loyalty.
Ad Age: You're spending around $10 million dollars on this launch. That's not huge in package goods, but it's much bigger than you guys have ever spent before. Why?
Mr. Ryan: It's about 10 times what we've ever spent. We did everything we've always done with engaging our advocates and PR, and there is more to continue to come on that front. The reason we spent more on paid media had to do with how quickly we needed to come out of the gate. We've never launched a product with this level of distribution right at the start [at] Target to Lowes, Whole Foods, CVS and Safeway. We needed to make sure we were supporting that distribution. Paid print and interactive gave us a little bit more predictability. [And] our products are so visual that print allows us to showcase it in a really strong way.
Ad Age: How has the recession affected Method?
|3 KEY POINTS|
|1. Recession is a good time to take stock, re-evaluate product lines and structure, and prepare for a time when consumers will bounce back.
2. It may be hard for a small company to afford ROI measurement, but how campaigns perform in social media is a fast and inexpensive way to see if they're working.
3. It takes careful, thoughtful hiring to maintain a distinctive culture.
Ad Age: Over the years you've tried to bring in folks with more traditional package-goods backgrounds while preserving your culture. How do you do that?
Mr. Ryan: We're very slow to hire and careful. We do bring people in from large organizations to keep scaling and growing as a company. But we are also careful to balance that with people who come from more innovative or creative-driven companies. So we brought Drew [Fraser] in as CEO, who comes from a really great CPG background, with time at P&G, Clorox and most recently, Whirlpool, which is where we worked with him as a strategic partner. But we also hired Matthew Lloyd to run our brand experience group, who comes from a pure creative and design background.
Ad Age: How have you structured your marketing effort?
Mr. Ryan: We do a lot of things in-house. We're just believers that, as we drive media advocacy and speed, you need to bring a lot in-house today. So we have a group called brand experience, made up of interactive, advocacy, PR, all those earned social-media pieces, as well as our creative department [and our] first consumer-insight planner. We took the traditional brand-management role, elevated it and detached it from marketing communications. We've really tried to elevate them into more of a business owner and true general manager. They report directly to Drew. Their job is to interface with marketing, the brand experience group, in the same way that they interface with product development and sales. My role in it is to tie everything across. We've got a really great team going between Drew, who brings that great business operating management expertise to the table, Adam [Lowry], who is the co-founder who really continues to focus on green sustainability in R&D, and myself who continues to focus on brand vision.
Ad Age: How do you measure your return on investment?
Mr. Ryan: Our budgets are too small for us to put a lot of effort and resources right now into measuring it. When you're running a brand at this stage, and we're also hands-on and pretty close to it, we're pretty instinctual in understanding what works and what doesn't. Social media and advocacy really help you. You start getting a pretty strong feel for how a program is resonating by how much noise you're generating and the quality of that noise coming back.
Ad Age: With the launch, and removal, of the "Shiny Suds" video, what did you learn?
Mr. Ryan: One big thing is that social media is live. You're really asking the audience to participate. And when you ask millions and millions of people to participate, you've got to treat it as live TV. Anything can happen. You've got to be nimble and fast. The biggest thing we learned out of it is that you've got to stay true to who you are and what your values are.
Ad Age: What keeps you up at night?
Mr. Ryan: The unknown, what's around the corner that we don't know? As we've been successful, who's plotting our demise that we're not aware of?