Inside The Pitch: Old Navy

Old Navy, San Fransisco

Budget: $180 million
Decision date: April
Incumbent: In-house

Market Situation

Old Navy is celebrating its 10th anniversary this year with a typically campy spot that features a reunion of the B-list celebrities who have appeared in its ads over the years, such as 1970s TV actors Sherman Hemsley, Morgan Fairchild, Erik Estrada and Joan Collins, all part of a decked-out group doing the hustle. The tongue-in-cheek ads have helped the brand appeal to mothers with “tween” daughters, ages 8-14. The “value line” of the Gap Inc. brands (the others are Gap, International Gap and Banana Republic) has made a significant contribution to its parent’s comeback. In fiscal 2003, Old Navy generated $6.4 billion in sales, almost 40 percent of the company’s $15.8 billion in total sales. Old Navy competes with a slew of competitors, particularly Kohl’s ($10.2 billion in sales) and, like just about every other retailer in America, the killer “budgeteers” led by Wal-Mart, whose sales and marketplace power dwarf the 850-unit Old Navy chain. Since its launch, the division has relied almost exclusively on a 50-person, in-house team headed by cd Dennis Leggett, who announced his retirement in March. He will remain through the transition to the new agency, however.

The Scoop

Now that Old Navy is a decade old and successful, the question the client wants the finalists in its creative review to answer is: How does it continue to grow beyond budget-conscious moms and families (especially to those older teenagers and young women who shopped at the store when they were kids)? The contenders have been asked to create a back-to-school campaign for final presentations, scheduled for April 14 at Old Navy headquarters in San Francisco. A key decision-maker is evp of marketing Susan Wayne, a former group account director at Leo Burnett in Chicago who worked on Kraft and Procter & Gamble, and helped launch the agency’s LeoShe research unit. Described as “conservative” and “buttoned-down,” sources said she wants an agency that not only offers a great idea but also an efficient process for working with clients. Old Navy president Jenny Ming did not| attend the credentials presentations, but she will be one of the executives at final pitches, along with Wayne, Leggett, Catherine Beaudoin, svp, marketing, and others from the company’s product design and research divisions. Boston consultancy Pile and Co. is managing the search.

The Contenders

J. Walter Thompson
New York

The WPP Group shop will seek to capture the fun, flea-market-like atmosphere of Old Navy outlets in its presentation. The work will be lighthearted and self-deprecating to match the brand’s personality. The pitch team, led by president Rosemarie Ryan, who joined in January, believes Old Navy needs more than ads. To that end, Ryan, a planner, turned to direct-marketing unit ThompsonConnect, entertainment partnership broker Icon Entertainment@JWT and WPP media shop MindShare for ideas. Ryan is joined by executive creative director Eric Steinhauser, deputy executive creative director Nat Whitten and worldwide director of account planning David Lamb. Steinhauser and Whitten were promoted to replace chief creative Mike Campbell in January. JWT will pitch Old Navy a week after being cut from the $300 million Verizon Wireless review.

Euro RSCG Worldwide New York

Euro will contend that the clothier should borrow a page from sibling Gap’s marketing playbook and go for an edgy fashion image it believes will be more relevant to a 19-year-old shopper than The Jeffersons, married to a price-value pitch. Euro will also go beyond ad creation and present nontraditional media strategy ideas, including in-store experiences, direct and buzz marketing. The $1.2 billion Havas network’s team includes New York and San Francisco staffers led by president and chief creative Ron Berger, partner and executive creative director Kevin Roddy (who worked on retailer Timberland at Fallon), chief strategic officer Marian Salzman and Beth Waxman, director of client integration.

Deutsch Playa del Rey, Calif.

Interpublic Group’s Deutsch will pitch with a team from its Southern California office, whose presentation will center on the recommendation that the Old Navy creative approach is still an effective one, but that it needs modernizing in order to get older girls to return to its stores. The shop will present a strategy that eschews Old Navy’s nostalgia for more contemporary celebrities and hipper music—the same tactics it has used to tout DirecTV (celebrities) and Mitsubishi (music). The Deutsch pitch team of seven will be led by managing partner and general manager Mike Sheldon and managing partner, executive creative director Eric Hirshberg.