Inside JC Penney's $430 Million Move to Saatchi & Saatchi

How the Retailer's CEO Was Wooed and Wowed by 'Lovemarks' Author

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NEW YORK (AdAge.com) -- Love was in the air this spring for Kevin Roberts and JC Penney. It all began aboard a corporate jet early in the season when Penney Chief Marketing Officer Mike Boylson heard about his boss' new crush, Saatchi & Saatchi chief Mr. Roberts, a silver-tongued New Zealander whom Penney CEO Myron "Mike" Ullman had seen speak at a conference.
Kevin Roberts' 2004 book 'Lovemarks' played a pivotal role in Saatchi & Saatchi's win of JC Penney's $430 million creative advertising account.
Kevin Roberts' 2004 book 'Lovemarks' played a pivotal role in Saatchi & Saatchi's win of JC Penney's $430 million creative advertising account.

'Lovemark' concept
On a cocktail napkin, Mr. Ullman sketched out the axis of love and respect -- Mr. Roberts' way of understanding how consumers relate to brands, as articulated in his 2004 book "Lovemarks." A "lovemark" -- an Apple or a Nike -- occupies the upper-right quadrant where it gets high degrees of both love and respect.

"He gave me a copy of the book and said that it was worth looking into and that JC Penney needed to be a lovemark with middle America," Mr. Boylson said in an interview just one day after the fast-blooming romance was consummated Aug. 31 with Penney's decision to move it's $430 million creative account to Saatchi.

DDB loses account
As happens, a heart was broken. DDB, Chicago, agency partner for the $18.7 billion retailer since 2000, was jilted with a line that's become familiar to ad agencies: We love you; now get out.

"We've been very happy about DDB," Mr. Boylson said. "This wasn't about being dissatisfied with DDB. The work is self-evident. We just felt we needed a new voice in the marketplace."

Saatchi, too, had a leave-taking to deal with. It bowed out of the $580 million Wal-Mart review, where it had reached the final rounds after the agency's in-store arm, Saatchi X, snared the retailer's shopper-marketing and employee-relations account.

Down-market chain
Mr. Boylson said the Saatchi X account doesn't represent a conflict for Penney. Saatchi, owned by the Publicis Groupe, will be charged with giving meaning to the once dowdy, down-market department store chain that six years ago teetered on the edge of bankruptcy.

With its "It's all inside" campaign, DDB helped overhaul the chain's image, adding more glamour and glitz to go after the "Middle American" consumer. Saatchi will try to take that and build a stronger emotional bond.

In "Lovemarks," Mr. Roberts, a former Procter & Gamble executive, argues that the notion of branding has been worn down by formulaic, clutter-creating, boring marketing. His solution is more consumer-focused, based on deep emotional bonds with companies and products. The book, with its Valentine-red cover, is a triumph of schizophrenic graphic design, sporting dozens of fonts and point sizes, and studded with quotes on love from everyone from Voltaire to Walt Disney to Homer Simpson. Imagine a book on branding written by a P&Ger who switched his or her market-mix models for a case-load of ecstasy.

Big boost for book
Mr. Roberts, of course, is sober about the idea and has based Saatchi's positioning on "Lovemarks." Until last week it could be argued the premise was more successful at conferences and on op-ed pages than with business development. The agency has far from lit the new-business scene on fire in recent years and has been most newsworthy for the so-called Saatchi 17 saga, in which a group of General Mills account staffers very publicly left the agency.

But Penney, which has been pining for a little more love from consumers as same-store sales growth slid from 4.9% in 2004 to 2.9% last year, was clearly smitten. By May there was a private dinner in Dallas, where Mr. Roberts dined with the CEO, Mr. Boylson and President Ken Hicks. "The relationship evolved and it just kept going, and we wanted to see if there was something there the more we saw how consistent 'Lovemarks' was with our long-range plan," Mr. Boylson said.

Formal presentations took place in June, and before the account was shifted, Saatchi began doing consumer-in-sight work for the retailer.

OMD and Dieste, Harmel
Penney's relationship with Omnicom media agency OMD will not change, nor will its relationship with Dallas-based Hispanic marketing shop, Dieste Harmel, also a division of Omnicom. There was no public review.

"We didn't bring in five or six agencies to pitch us, something companies do when they are looking for answers and a new identity," Mr. Boylson said. "For us, our long-term plan was already crystal clear."

Fittingly, some new work is expected around Valentine's Day, a prelude to a big blast around the Academy Awards later that month. In the meantime, Penney's 300-plus marketing department will be boning up on Mr. Roberts' way of thinking. "It's going to be required reading now," Mr. Boylson said.
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