Tony Palmer, the former Kellogg Co. executive who became K-C's first chief marketing officer in October, has hired three executives for new posts overseeing global brand development, market research and integrated marketing communications.
It's a major staff up for a company that didn't even have a CMO for its first century-plus of operation. But Mr. Palmer said the group is needed to help guide the organization and move best practices around the world at a critical juncture for the $17 billion global marketer.
Promises made to Wall Street
K-C is looking to deliver on promises to Wall Street to spend more on marketing, where it often has lagged its chief rival, Procter & Gamble Co. But K-C also is dramatically re-allocating how it spends, away from TV and toward nontraditional media in the U.S., which Mr. Palmer said is projected to account for 25% of the company's media spending this year compared to only 10% in 2004.
Joining Mr. Palmer's group this month are:
Executing global ideas
"As we look back through history, we built our brands with very powerful technology and very good innovation and marketing capability," Mr. Palmer said. "However, I'd say it came a lot from the technology and functional differentiation. ... We're not really taking our best marketing practices from around the world and truly making it travel."
The song "Let It Out" from Kleenex's recently launched global ad campaign of the same name by WPP Group's JWT, for example, got play on radio stations and became the 35th most downloaded song on iTunes in the U.K., he said. He'd like to test ways to give the song the same cachet in the U.S.
The new team, he said, is also working on developing a common marketing language and set of strategic, branding and research tools for the company, "so we're speaking the same language around the world."
At P&G, one of K-C's chief competitors, Global Marketing Officer Jim Stengel rolled out a similar marketing framework in recent years. Updates on a brand's learning in basic areas such as the "who" (consumer segments) and the "what" (product and marketing initiative plans) form the basis of annual business reviews Chairman-CEO A.G. Lafley conducts with executives overseeing P&G's top 20 brands each year, according to people familiar with the company.
"We also have a big opportunity around the efficiency of our marketing spend," Mr. Palmer said. "As a company, we're not using our scale as effectively as we could, for example, with our service providers, by standardizing our [market] research approaches."
He said the new team also will focus on developing marketing talent at the company.
Understanding the agency side
The hire of longtime agency executive Mr. Sirkin to manage agency relations for K-C is similar to hires rival Johnson & Johnson has brought into its central marketing group within the past two years. Mr. Palmer said he wasn't sure whether that should become a trend for everyone, but he said it is important to have someone who understands how the agency business works at a time when marketing is changing so rapidly.
"With all the pressure going from [TV] creative into [alternative] media, and all that complexity, Clive understands the industry from the inside out," Mr. Palmer said. "He's been a client, but he can also help us through driving efficiency, because he understands the agency's cost structures and what the implications of what we do will be for the agencies. ... At the end of the day, it's not about cost reductions with agencies. It's about effectiveness."
The shift to nontraditional isn't just about digital media, Mr. Palmer said, but also includes greater use of such things as in-store media, retailer loyalty programs, having surgeons promote K-C's gloves on their websites, or having Nascar pit crews use the company's Wypall towels.
"We have three of the best agencies in the world in my opinion with [WPP's] MindShare, O&M and JWT," he said. "We should be able to get a lot of our service requirements out of them. But we should also be seeking out unique approaches from unique service providers."