A once-dominant brand was sagging. Sales were down 14% over two years. Upstarts were stealing market share. Dissatisfied customers were leaving Blockbuster Video rental stores without the popular new releases.
The chief marketing officer post had been vacant for a year, and parent Viacom was losing faith in the brand it had purchased for $8.4 billion in 1994.
"The marketing organization was in some disarray, and the agency relationships were all floundering," recalls Mr. Notarnicola, 48, who came to Blockbuster in August 1997 after 19 years with Southland Corp., lastly as VP-marketing for 7-Eleven.
Under new CEO John Antioco, Blockbuster charted a new path. Central to the makeover was sales agreements it signed with movie studios. Blockbuster received larger quantities of the latest releases-at a lower per-video cost-and split rental revenues with the studios. It was up to Mr. Notarnicola to market the change.
Mr. Notarnicola dropped the "Make it a Blockbuster night" theme in favor of "Go home happy." The new positioning touts more hits in stock.
"We directly attacked all the roots of dissatisfaction," Mr. Notarnicola says.
The company backed the new campaign with a near-doubling of its media investment. According to Competitive Media Reporting, Blockbuster spent $151.5 million in 1998 compared with $87.6 million in 1997. And the company advertised heavily on the weekends.
"We're using broadcast on a continuity basis, with big promotional overlays two or three times a year to create greater reach and frequency," he says. "The consumer seems to respond with a greater share of their business."
Responded indeed. The company logged 37% revenue growth in 1998, to $3.9 billion. Same-store sales and rental revenues grew by 15%, at a time when analysts expected the industry to remain flat. The company now commands 28% of the market, up from 25% when the new advertising debuted.
For Mr. Notarnicola, the challenge and results have been "exhilarating."
"It's one of those moments of a marketing lifetime to be part of this kind of