Sara Lee toughens strategy on budget and ad agencies

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Sara Lee Corp. is taking a more centralized approach to handling its $500 million global marketing budget, supporting designated "killer" brands and not-so-subtly throwing its weight around with agencies.

In April, the conglomerate named Lee Chaden as its first head of global marketing and sales to guide agency relations for shops handling its varied food, household and apparel brands. One of his first acts was to consolidate a host of brands at Publicis Group's Publicis in Mid-America, Dallas. To support his desire to "become more important to fewer agencies," further consolidation is possible.

Mr. Chaden, 61, had previously acted as head of Sara Lee's office of brand equity development, a part-time role during his tenure as senior VP-human resources. That brand-equity office, and the subsequent creation of the global marketing and sales role, is part of CEO Steve McMillan's ongoing push that began in 2002 to ramp up marketing efforts and develop a centralized approach never before seen at the company. "Sara Lee has been way too decentralized in a consumer world that demands more centralization," said one food analyst.

Mr. Chaden is developing a list of "strategic investment" brands. These are defined as between five and 10 key icons expected by fiscal 2007 to gain compound annual growth of at least 10% through extension into new categories or geographies and to reach a minimum of $500 million in sales. Although no specific percentage has been determined, these brands will command the lion's share of Sara Lee's global marketing budget, even sacrificing short-term profit to make them, as Mr. Chaden said, "killer brands." Other brands will be relegated to lesser spending categories dubbed "support and grow," "sustain" or "manage for cash."

Among those on the strategic investment list will be the Sara Lee brand, an under-leveraged now $200 million icon that Mr. Chaden has made his personal project to build to a $1 billion brand by 2007. Another is Hanes, a $2 billion brand in the U.S. alone, now undergoing a "vision-refining" exercise among internal marketing staff and its agency, The Martin Agency, Richmond, Virginia. Among Sara Lee's other shops are Publicis Groupe's Leo Burnett Co., Havas' Euro RSCG Tatham and Omnicom Group's BBDO, all Chicago.

`corporate face'

Previously, Mr. Chaden said, the operating divisions would present their annual plan to Mr. McMillan and that was the extent of corporate oversight. Now though, part of Mr. Chaden's job description is to be the corporate face to ad agencies, many of which, he said, have been unaware of the largess of its global spending and "that we can be a very big and important client." His new corporate involvement also has resulted in agency shifts, for example the consolidation of the Sara Lee brand at Publicis in Mid-America.

"We had two agencies, one in deli, one in baked goods, and both divisions were pleased with the work," Mr. Chaden said. "But I had very strong point of view that to make this a billion dollar mega-brand over a short period of time, we are going to have to speak with one voice to the consumer." Mr. Chaden worked with Publicis management to get them to commit to bringing on additional senior talent to manage the business ("an important step in our willingness to move the business there") and the shift was made. Deli had previously been handled by PGC Advertising, Dallas.

Publicis will gain more business as Sara Lee expands its namesake brands into new arenas, likely among them frozen entrees and fresh sandwiches that have been cited by consumers as places they expect to see the brand. A new Sara Lee item for bakery is expected in January. Publicis also has been given Sara Lee's Champion and Just My Size brands.

great work reinforced

Mr. Chaden asserts that he has no specific reviews under way and that he does not plan to move work from an agency just because they have only one Sara Lee brand if in fact they're doing great work.

Great work is being reinforced at the company, he said, as newly mandated creative briefs for each brand are to be turned into distinctive, relevant advertising that resonates with target audiences. He cites a new campaign for Jimmy Dean (which, along with Hillshire Farm and Ballpark, will get 90% of the advertising budget of the company's 10 retail meat brands), as an example. The mock-umentary style ad from Burnett features a Big Wheel Demolition Derby and Squirrel Tag to humorously depict how Jimmy Dean's microwaveable breakfast sandwiches offer on-the-go fuel to get through even the most taxing of events.

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