Marketing ROI - Kodak's "Celebrity Apprentice" Experience

Last month Andy wrote in asking "I'd love to see something on marketing and cost benefit analysis, it's been my experience the two things rarely go hand in hand. I hope I'm an isolated case but guess that I'm not."

I'm making that the focus of this month's newsletter. On Thursday, Peter Roosen and I interviewed Jeff Hayzlett (2nd from the right), Kodak's Chief Business Development Officer and Vice President and David Lanzillo Director, Corporate Communication and Vice President, Communications & Public Affairs.

Tip #1: Try something new if what you are already doing isn't working.

We asked them about their experience in having Kodak featured on Donald Trump and Mark Burnett's "The Celebrity Apprentice" show a few weeks ago.To put this into perspective, Kodak, a 125 year old company, has undergone a major transformation as its traditional photographic films and papers business has been virtually eliminated by the advent of digital photography. The company has gone from having 150,000 employees in 1988 to 51,000 in 2005 and 27,000 today. 60% of the current employees are new to the company within the past 4 years. Yet Kodak remains on the Fortune 500 list in spite of these huge changes to its traditional business.

Jeff said there were two impacts of having Kodak featured on "Celebrity Apprentice" The first one was internal. "It was a morale lifter. Employees see that we are back on the air." He said of the major transition completed at the end of 2007 that employees had experienced considerable "transformation fatigue" resulting from "cost crushing" and "pumping into new businesses."

Tip #2: Don't stack various campaigns if trying something new. Kodak focused on one big one for this time frame - a risky one.

The second impact of being featured on the Trump show was external. Kodak paid about $2.5 million to engage in what Jeff described as "the best product placement deal in history." He said there were "4.6 mentions per minute, about one every 15 seconds, with a total of 89 million viewers. We doubled our sales that week and weren't doing anything else at the time. This was for sales on consumer stuff for what we normally had going out the door."

Tip #3: Create slogan to help communicate your idea or strategy.

Kodak's focus for the show was promoting its new cost model for printer ink consumables. Kodak is launching into the high margin ink market with its "pricey ink stinks" slogan. Jeff said that he would be on live television this week "debating Gene Simmons on getting rid of pricey ink."

David figured the advertising and public relations value equivalency for the Trump show was in the "tens of millions of dollars."

Tip #4: Activation counts more than buzz.

With the improvement of technology and increased competition, there is ever-increasing pressure to make marketing spending more accountable. David and Jeff claimed that activation (marketing efforts that drive sales and not just awareness or buzz) was the thing that counted. Jeff said "if you talk about buzz building in this company, you buzz yourself out the front door."

Tip #5: Have people from different key areas on board with your marketing.

Kodak has a brand and development council with representation from R&D, legal and M&A on it. It also has a marketing operations council tasked with ways to leverage the marketing spend. The company also has its marketing strategy council led by the CEO. Kodak has an EMM (Enterprise Marketing Management) system across the company with dashboards or predictive indicators for campaigns and growth initiatives. This is especially important when one considers that 80% of the company's revenue comes from 19 products, only half of which were in existence 10 years ago.

Tip #6: Make things measurable using whatever tools are needed.

Quantifying marketing ROI (return on investment) is not new. It just hasn't been very doable in the past. Soft measures including brand awareness were more easily determined than strict financial measures such as ROI for marketing investment. Technology and improved ways of measuring customer behavior is making the difference today. Beyond basic software like CRM (customer relationship management) packages, the ability to employ technologies to help track and analyze relevant knowledge helps companies to deepen their understanding of the customer. That is a prerequisite to being able to apply the financial return on investment measurement. Kodak is a large company that has taken this to a high level as an important part of its strategy for transforming itself from a traditional photographic films and papers company into a key competitor in the digital marketplace.

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