1995 YEAR IN REVIEW;MARKETER OF THE YEAR;AMAZING REBOUND VAULTS EISNER TO TOP;ANIMATED DISNEY TIE-INS, OVITZ AND EVEN A EURO PROFIT; THEN THERE'S THAT ABC DEAL, TOO

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Once upon a time-actually, at the end of 1994-life wasn't so cheery at the Happiest Place on Earth, Walt Disney Co., or for Michael Eisner, its chairman-CEO.

Despite reporting 1994 revenues of $10 billion, up 18% from 1993, thanks to "The Lion King," Disney endured a string of heartaches and business hindrances.

The year began with the death of Frank Wells, Disney's trusted and admired president-chief operating officer. It ended with the state of Virginia rejecting Disney's plan to build a historical theme park in its backyard. In between: Disneyland Paris floundered financially; ambitious movie chief Jeffrey Katzenberg departed; and Mr. Eisner underwent quadruple-bypass surgery, causing concern on Wall Street and in Disney's board room, especially since Mr. Eisner hadn't found a replacement for his No.*2, Mr. Wells.

But Mr. Eisner corrected the Disney tilt nearly 180 degrees in less than 365 days. There were movies that fared well critically and commercially, successes for other marketers with tie-ins and the appointment of a new superstar lieutenant. And, of course, there was the most stunning and best-acclaimed media merger in a year filled with them-a merger with Capital Cities/ABC.

In honor of this turnaround, Advertising Age has named Mr. Eisner its Marketer of the Year for 1995.

Mr. Eisner, 53, a man who wanted to become a doctor when he was a kid and ended up becoming the most powerful man in Hollywood, now becomes the first repeat winner since Advertising Age inaugurated the award in 1971. He was first saluted in 1988.

At the core of Disney's comeback is its signature product: movies.

"[Studio head] Joe Roth has developed the right products and the marketing has been very strong. It's really picking up strength," said Jessica Reif, an analyst at Merrill Lynch.

The blockbuster successes of animated gambles "Pocahontas" and "Toy Story" gave the company new brands to merchandise and again proved the power of the Disney brand name with marketers.

"Pocahontas" had its doubters because of its politically incorrect historical revisionism of Native American history and strong female skew. But Disney's marketing machine made the difference: an early release of the soundtrack and the strength of its hit single "Colors of the Wind" got audiences primed for another memorable Disney musical; an unprecedented premiere in Central Park generated massive press attention and positioned the movie as yet another can't-miss Disney family event; and a host of marketers, led by Burger King Corp. and Nestle USA, contributed to a $140 million marketing push that helped to sell the movie to boys.

As of Nov. 28, some five months after its release, "Pocahontas" was still playing in over 200 theaters and had grossed in excess of $141 million.

"Toy Story" on paper had more mass appeal but in execution became a wildcard because it was the first completely computer-animated film. Disney marketing did yet another classic job, putting together a $125 million promotional program that included Disney newcomer Frito-Lay. The film also scored through both stellar critics reviews and licensed toys that are must-have Christmas presents among kids today.

As of Dec. 5, "Toy Story" had grossed $65 million in just two weeks.

"There's an overriding residual brand value that is simply a function of being aligned with a company that is synonymous with providing the highest quality family entertainment. We recognize it and we value it," said John Cywinski, Burger King's VP-USA marketing.

But Disney's silver-screen successes in 1995 went beyond animated fare. "Crimson Tide" was a summer blockbuster, inching over the $100 million mark. "Dangerous Minds" and "While You Were Sleeping" earned more than $80 million. Of the three, "Dangerous Minds" benefited the most from savvy marketing, with a soundtrack and ads targeting African-Americans and urban moviegoers.

Even "Dead Presidents" and "Powder," saddled by limited appeal and poor reviews, performed beyond expectations, each grossing about $30 million.

Also looking up: theme parks. Attendance at Disneyland in California had been slipping steadily in the '90s, with natural disasters and a sluggish economy discouraging tourists and no new attractions to sway them. But its new state-of-the-art thrill ride "The Indiana Jones Adventure," supported by an "Indy"-themed Super Bowl halftime show produced by Disney and corporate underwriter AT&T Corp., is expected to help drive Disneyland attendance to its highest mark in years, possibly over 14 million.

And the good news from Europe was that Disneyland Paris, formerly known as EuroDisney and partially owned by Walt Disney Co., finally posted a quarterly profit after several years of dismal returns.

Other new business initiatives included Location Based Entertainment and The Disney Institute, a new marketing concept for its vacation business in Florida, and an entry into multimedia through Disney Interactive, a new division.

And Mr. Eisner finally found a No.*2 in no less a person than Hollywood's craftiest dealmaker: superagent Michael Ovitz, who left Creative Artists Agency and assumed the presidency of Disney in October.

"Don't tell [Mr. Eisner] what can't be done," said Dennis Holt, president of Western International Media, which handles Disney's advertising media buying. "If he would have become a doctor, he would have cured AIDS by now.

"He has an explosive mind that stretches every opportunity and researches every possibility and can look over the horizon," added Mr. Holt. "But he can also make decisions quickly, capable of pursuing with passion and moving away unemotionally."

But it's the forthcoming $19 billion merger with Capital Cities/ABC that underscores Mr. Eisner's visionary abilities. The coupling of Disney content with Cap Cities/ABC distribution has raised the ante for media companies to compete in a marketplace going global.

Such mergers mandate that "synergy," a marketing discipline Mr. Eisner has championed and refined at Disney, graduate from buzzword to way of life. The M.O. for the future: brands; cross-promotion; line extensions; then repackage for new markets, from Siberia to cyberspace.

And because the seemingly seamless Disney/ABC linkup suggests so many lucrative new opportunities, Mr. Eisner's merger emerges as the most significant for marketers and the one that will be more closely scrutinized by pundits and investors. These opportunities are what makes this pact stand out from the year's other major media mergers-most notably Westinghouse Co.'s purchase of CBS and the Time Warner/Turner Broadcasting System union.

"It has certainly created the opportunity for Disney to forge far-reaching relationships with major marketers," said Michael Wolf, partner and head of the media and entertainment practice at Booz Allen & Hamilton, a management consultancy. "Marketers and advertisers are going to turn even more to Disney to solve marketing problems and connect with consumers."

Mr. Eisner and Co. have been coy about how they will use all their new toys. With Disney's backing and blessing, ABC announced in December it will launch a new 24-hour global news network in 1997 that will be cross-promoted with the parent network and leverage ABC brands like "20/20" and "Nightline".

Disney will program ABC's Saturday morning lineup. Look for Disney/ABC to brand the weekend morning and sell advertisers integrated marketing packages that include ad time, promotions and licensing rights. Disney has also talked about bundling entertainment programming into packages and peddling it abroad.

The Cap Cities deal also brings on board sports cable TV power ESPN, which approaches marketing and brand extensions in a Disneyesque way. Empowered with global TV resources, Disney's 200-acre Walt Disney World International Sports Complex in Florida could become the place to stage a sports event once it's completed in 1997.

Mr. Eisner's strengths are his vision and his ability to find the talent to not only implement but take the ball and run with it.

While Mr. Eisner (who declined to be interviewed for this story) may have made the announcements, it was Dick Cook, president of marketing and distribution for Buena Vista Pictures, who came up with holding the Central Park "Pocahontas" premiere and building a "Toy Story Funhouse" in Los Angeles.

Marketing partners give great credit to marketing executives Brett Dicker, Max Goldberg, Bill Gibbons, Ken Lewis and Mr. Cook, who have been steady fixtures since 1991 and possess much creative freedom.

"The genius of Michael Eisner is the corporate culture he has created that allows Disney to be creative, to practice synergy," said Mr. Wolf. "No one has been able to do this like Disney."

Jeanne Whalen contributed to this story.

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