Stengel: Private Label, Digital Change Game

Although it’s been nearly six months since he left his post, these days, Jim Stengel, the 53-year-old former global marketing officer at Procter & Gamble, is as busy as ever. Stengel is working on a book, Packaged Good, due out next year, and is a marketing consultant to clients in the healthcare, retail and food industries. (Stengel didn’t name names, but since he signed a three-year noncompete agreement with his former employer, they don’t conflict with P&G.) On top of that, he recently joined the advisory board of marketing analytics firm MarketShare Partners and has access to more than 350 designers at his office (within LPK) in Cincinnati. Now a free agent, Stengel was able to speak freely on P&G’s competitors, other brands he admires and the state of the industry. Some excerpts from his conversation are below:

Brandweek: Give us a snapshot of what a typical “Day in the Life of Jim Stengel” is like if there is such a thing?
Jim Stengel: I’m wearing jeans a lot more. I’m dressing much more casually. I’m investigating new ideas even more. I’m meeting a lot of new people. I’m spending time in a lot of diverse locations and so, I’d say, a typical day could be, get up in the morning, work out/exercise, take a few calls from home, do a video conference, work a little on the book, call a few people, work with a few of my consulting clients on email and so on. It’s just much more flexible, much more of my own kind of pace and design. I think I’m as busy as I was at P&G. It’s just different things that are keeping me occupied.

BW: Life post-P&G: Do you miss it? Are there days where you wake up thinking you could still be revolutionizing marketing at the world’s most powerful packaged goods institution? Or, are you finding you are making an even bigger impact on your own with this think tank consultancy you’ve started?
JS: I think I had a big impact at P&G. I was there seven years [as global marketing officer]. I did everything I wanted to do. I think I now have a big impact on my own in touching a lot of different people and companies in a different way than I could at P&G. But P&G will always be special to me. I won’t consult with companies that compete with P&G. (I won’t do that.) At this point in my life, through the book, through teaching, through networks, through consulting, I can get ideas out there in a way I couldn’t at P&G. And you know, I love the people at P&G, I love the purpose of the company, I think they continue to live that and I’m very proud of what I did for the company, but I’m really enjoying what I’m doing now. There is a time for everything.

BW: How is Packaged Good going?
JS: I’m really excited that work has begun on a global study that will be the foundation of the book. The study will look at brands around the world that have created tremendous financial value over a long period of time and it will look at how they do marketing differently and derive principles from that. These principles will form the backbone of a rethinking of marketing that I will bring to life in the book.  We will talk to a large number of people in five countries to see if they understand what those brands are projecting, to ensure that their brand ideals and values are relevant and meaningful to consumers.

I’m also excited about how my academic work is intersecting with the book. I’m working with graduate students at UCLA to help develop a marketing plan for the book so it has maximum social impact. These students are participating in a case competition and I’m going to be at UCLA. Twenty-two teams tried out for the competition, eight were chosen. They will give me a recommendation on the positioning and marketing plan of the book. I’m part of a panel judging it, which includes [UCLA marketing professor] Sanjay Sood, Laurie Coots [CMO at TBWA\Chiat\Day], and Cassie Hughes [co-founder of Grow Marketing, a nontraditional marketing and publicity agency]. It’s great experience for the students and it will give me all these ideas. And I give the students a cash reward. (I also will take the winning team out to dinner.) It gets them involved in the ideas of the book. I like to think I’m working with a community of people. That way, I’ll get the best ideas and the maximum impact with the book. This idea of collaborating with young people, I really like.

BW: What bugs you about the ad industry nowadays?
JS: I find there are a lot of people out there screaming about how bad things are in marketing. A lot of people . . . are telling great stories. [But] I think what’s missing is a deep understanding of the brands that are setting the pace for growth. An understanding of the kinds of things they are doing that can help others be better marketers, insights that can help you immediately if you are leading an organization; this is really why I am [writing] a book. I want to make this learning inspirational, but also very practical, very relevant, but very up-to-date for anyone leading a commercial organization.

BW: What are the greatest challenges facing marketers; more specifically, the consumer packaged goods industry today?
JS: I don’t think things are going to go back to where they were three years ago. Understanding real consumer trends and being able to look ahead will be very important for consumer packaged goods companies. I think there are two big trends that are going to present the biggest challenges and opportunities: 1) Increased acceptance of retailer and private label brands; and 2) adding digital to the branding model. How companies work with retailers to have maximum impact on value creation will be an area of interest. This notion of, “What’s the impact of the world going interactive? [adding] digital to the branding model,” that will just continue. The implications of digital for brands will be very profound for who they are and what they’re trying to do in service of consumers. Push advertising will continue to be less and less important. It’s more about helping consumers, serving, on being of utility and there are lots of ways to do that with the Internet.

BW: Things aren’t going to be the same as they were three years ago. What do you mean by that?
JS: This recession has caused people to reevaluate priorities and habits. A lot of people are saying, “Let me get back to a more simple way to live,” and people are spending more time at home, they’re doing more gardening, saving more, they’re getting back to what’s really important in their lives. That impacts consumption. There’s some really amazing data on that which marketers really must internalize and continue to look for opportunities to serve in new ways.   

BW: You talk a lot about purpose-based marketing. But don’t you think that consumers, in a recession, are more concerned about value than purpose?
JS: I don’t think it’s an either/or. I think great brands have a strong sense of their meaning, their ideals, their mission and their ideas represent a tremendous value to consumers. I think there have been cases where you see brands out there who are . . . like what Hyundai did with the Super Bowl is a great example [The “Contract” campaign, via Goodby, Silverstein & Partners, offers to buy back consumers’ cars if they lose their job within the year]. They are very much in touch with consumers, what’s on their minds and they communicate their value through that message. BBDO [also] broke an interesting campaign for AT&T. [Ads depict a timeline that shows how the company survived similar tough times in the past, including the Great Depression and World War II.] Those things done well actually create long-term brand value and equity, and short-term sales.

BW: You’ve talked about how consumer trust in brands is at an all time low. What do you mean by that?
JS: Look at what’s going on in the last few months . . . What good brands have to do, what good companies have to do is more than ever deliver on what their promise is. I think that comes on top of several years of lousy stories about brands that have disappointed consumers. I think great brands have to tell their stories. They have to do great things . . . If the money we spend in advertising/marketing can be spent in a way that brings joy, help and service to people by making them laugh, giving them an idea or solving a problem, the industry will be far better off because brands will be healthier.

BW: How far along or behind are general market agencies when it comes to embracing digital marketing?
JS: It’s mixed. Some get it and are moving forward and building capability, some are behind. And I think there is no doubt, several years out, the digital agencies and ad agencies have to basically have the same capabilities. You can’t be an ad agency if you don’t have digital capabilities. They are all moving that way. When I think of the ad agencies, there are so many brilliant people out there who really get the emotional side of brands. But to build and deepen brand affinity, we have to bring those [capabilities] into the digital world [as well].

BW: Why have clients and agencies taken this long to embrace digital?
JS: It’s like any company that has to build a major new campaign. It doesn’t happen overnight. The first thing you have to do is admit, “We don’t have it. We have to build it,” and sometimes, it takes leaders too long to do it. A lot of industries are obsolete now because they didn’t move fast enough on change. The ones that are winning and leading have recognized that. TBWA . . . [your sister magazine, Adweek] named them its “Agency of the Year.” They were one of the ones that embraced it quickly; they realized they needed to [in order to] move forward. They have to do it, but you have to realize if [agencies] were factories, it’s about new lines, new work systems, new processes, new capabilities, and, in some cases, new people and so, it’s not a small [transition to undertake].

BW: P&G led the charge for clients to attend the Cannes advertising festival. Given economic concerns, do you expect their presence to decline substantially this year?
JS: It will probably be smaller and more serious and more focused, and I don’t think that’s a bad thing at all . . . Clients have found [the festival] to be useful. My understanding is that P&G is going to be back this year and, so, I think it’s an opportunity for great external focus and great inspiration and great benchmarking and great opportunities to build relationships, and I think that is important anytime, perhaps more so in a bad economy.

BW: Has the role of global marketing officer, or in some cases, CMO, changed? How different is it for someone to get into marketing nowadays compared with when you started?
JS: I talk to a lot of CMOs. I hold a lot of discussions and forums with CMOs and I think [the profession] has changed positively. I think they are more valued than ever. I think the role is becoming better understood. It’s making marketing more important. There are more seats at the C-suite table for CMOs. They are being held more and more accountable by their CEOs and companies are attracting even better talent as a result. It is a better, more capable, more experienced group of people. There have been some really positive changes.

BW: Who would you consider to be your biggest rival while at P&G? Unilever? L’Oréal?
JS: They were all good. They were all tough. Those you named are the obvious ones. But you also have to watch for the companies on the edge, the ones who are maybe marketing, say, on DirecTV. You always have to look for what’s an emerging trend, ideas, interests, consumer concern—those are just as important. Companies won’t miss the major competitors, but they might miss something from the edges.

BW: And, your all-time favorite P&G ad?

JS: I am a sucker for Pampers. I still am. I love them all, but I’m a sucker for Pampers. I like the “Peace on Earth” spot, which is highly emotional and also highly effective.

BW: Tell me one seldom-asked, and very interesting fact about yourself.

JS: I have a circle of friends from grade school. We have an intimate social network. We talk every day. And they’re kids I’ve known since I was in first grade. There are five of them. We talk about all kinds of things: politics, friendship, marriage, kids. The thing is, I would never want you to have access to those conversations.