Marketer A-List 2012

Serta Can Sleep Soundly After Taking Category Lead

Company Leapt Over No. 1 Sealey by Herding Its Sheep Into Cause Marketing, Mobile and Digital

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None dare call the mattress business sleepy.

The memory-foam and air segments have grown rapidly to about a third of all mattresses sold in recent years. Recession in 2008 ended a 25-year streak of the industry growing at twice the rate of gross domestic product.

Amid those changes keeping industry executives up at night, and despite a late start in the foam segment, Serta overtook industry leader Sealy for overall U.S. brand leadership after 40 years of trying, according to trade journal Furniture Today. And Serta continues to gain sales and share this year behind new products such as its 2011 iComfort with Cool Action Gel Memory Foam and this year's iSeries foam/innerspring hybrid.

What hasn't changed is Serta's 10-year-old "Counting Sheep" campaign from Doner, Detroit, which has doubled the brand's unaided awareness, according to Senior VP-Marketing Andrew Gross. Mr. Gross joined the company in 2006 after a career with Helene Curtis and Unilever, and resisted any newcomer urges to put the sheep out to pasture.

"Counting Sheep" TV and digital ads and promotions around the industry's key sales periods centered on such holidays as Memorial Day, Labor Day, Fourth of July and the year-end holidays have played a key role.

"We had ownership that was committed, so we didn't cut back on our investment in our marketing or our retailers or product development through the ups and downs of the recession," Mr. Gross said. The economic climate sent sales down around 9% annually in 2008 and 2009. Last year, Serta grew sales 18%, according to Furniture Today. And so far this year, Mr. Gross said Serta continues to grow ahead of the industry's 15% pace.

The sheep have been overlaid in recent years with more product and promotional messages, including a virtual "buy a sheep" cause-marketing program with City of Hope and becoming the official mattress of the National Sleep Foundation.

Serta also has won distribution gains in a highly fragmented retail market, particularly at Sam's Club, Mattress Firm, Macy's and Rooms to Go, he said. The fragmentation is a big change from his consumer-packaged-goods days "when 80% of the sales came through 10 retailers." Also different in the mattress category is the need to market not only direct to consumers but also to and through retail-sales reps.

Digital video, search and mobile marketing—all shepherded by Doner as well—also play a growing role, he said.

"We're finding, like most companies, [that ] mobile has been explosive in the past 18 months," Mr. Gross said. "It was less than 10% of our web traffic last year. Now it's close to 30%. And we find that peaks during holiday periods when people are out shopping."