How Purpose Affects the Bottom Line
At Ogilvy & Mather's New York headquarters, the heads of marketing for three of the country's best-known brands eagerly picked one another's brains about the strategies that are working and the campaigns that are resonating. Though Seth Farbman, global chief marketer at Gap; Jonathan Mildenhall, VP-global advertising strategy and creative excellence at Coca-Cola; and John Kennedy, VP-corporate marketing at IBM, are Ogilvy clients, it was the first time they'd come together as a group.
And while the executives have different products to sell and goals to achieve, they are approaching their businesses in the same way. They are defining, honing and marketing their brands' purpose -- in Ogilvy lingo, the "big ideal." Separate from corporate social responsibility, this entails committing to and then identifying a brand with a cause of "enduring importance."
"[These] brands have a point of view about the world. If you look at [their] major competitor, they don't have a strong point of view," said Miles Young, worldwide chairman-CEO at Ogilvy. "We've looked at brands that have a strong point of view vs. brands that don't, and you can see a clear differentiation in brand imagery and consumer bonding translated into market share. That is a strong argument for purpose in an organization."
"It's good for the industry," added Colin Mitchell, worldwide planning director at Ogilvy. "It's what marketers and agencies can really add to the corporation. It can help give the corporation its soul back and a sense of direction and mission. That ultimately affects all sorts of things."
Below are more thoughts from the three executives.
Ad Age : What is your brand's purpose, in a sound bite?
Mr. Farbman: Gap's ideal is to bring American values and a sense of inclusiveness to an industry that otherwise will not provide it.
Mr. Kennedy: Progress is how we pull it together, in a word. It's the belief that science, math, engineering and computing can make companies more competitive, cities more livable and improve society.
Mr. Mildenhall: For Coke, our purpose has always been to spread optimism and happiness further each and every day.
Ad Age : Purpose has been all the rage for the past few years. Will it continue to gain steam or is it just a fad?
Mr. Farbman: When I look at the fundamental contract that corporations have with society, purpose-driven branding is going to get more and more important. In exchange for limited liability, access to resources and government infrastructure, you must provide products and services that are of good quality for a fair price. That contract had disappeared and is coming back in a big way. You have to figure out what you do beyond your daily transaction.
Mr. Kennedy: It's going to be about purpose-driven corporations. As a result of transparency brought to bear by social media and other technologies, our markets and customers can see behind the firewall. It's forcing marketers, really the entire C-suite, to confront how they come across externally and how they operate internally. It's going to change the role of marketing and the role of the CMO.
Mr. Mildenhall: At the heart of every good organization is a purpose. The challenge for all of us is to channel that purpose through every aspect of the organization, so that consumers can see it in the communication. Brands like Coca-Cola and Fanta have purpose at their core. And when we get it right, we put the purpose into marketing and communications.
Ad Age : What impact can purpose have on the bottom line and your place among competitors?
Mr. Farbman: Optimism sells. [Our] platform is called "Believers in Bright." You see it expressed externally as "Be Bright." We have a very clear filtering system now. Is that bright? Is it not? Is that optimistic? Is it not? We're seeing early traction. That creates more optimism. It's a virtuous cycle.
I challenge anyone to understand what [clothing retailer] Zara stands for. You buy, you transact; you leave. Then what? H&M is very similar. They've been trying to get a little more purpose into their brand, but there isn't a clear competitor [for Gap] in this sense of "What do you stand for?"
Mr. Kennedy: Since we've launched "Smarter Planet," the results have been very strong actually. It's resulted in a lot of companies asking for more help, which is what we like.
We are always surveying the competitive landscape. That is essential to cultivating any brand strategy or marketing strategy. But we develop our brand positioning and strategy in response to the unique character of IBM and the purpose we serve for our key constituencies, rather than in response to what the competition is doing.
Mr. Mildenhall: Purpose drives productivity. It allows the people of your organization to get behind something and understand it. A brand like Coke is easier to manage than a newer brand, where consumers aren't really clear on what its cultural purpose is .
We have two sets of competition, category competition and competition within the space of the purpose we're trying to communicate. In terms of understanding where popular culture is going, we're going to be much more successful if we look at businesses and brands in the space of happiness than if we just look at the beverage category.