Target marketing

Marketing is now about turning brands into content producers, rather than creating 30-second ads. Steve Barrett talks to Target CMO Jeff Jones about content, risk taking, and bucking the CMO turnover trend.

Target marketing

Marketing is now about turning brands into content producers, rather than creating 30-second ads. Steve Barrett talks to Target CMO Jeff Jones about content, risk taking, and bucking the CMO turnover trend.

If the accepted wisdom is true that the average tenure of the modern CMO is about three years, then Target's latest incumbent in the post has a lot to live up to.

Jeff Jones joined the Minneapolis-headquartered retailer in April 2012 as EVP and CMO, but he followed two individuals who have dominated marketing at Target since as far back as 1969.

Michael Francis joined the company in 1986, taking on various senior marketing roles culminating in a spell as EVP and CMO from 2008 until October 2011, when he left for an ill-fated short stay at JC Penney. Francis is now a marketing consultant at Gap. Prior to that, John Pellegrene worked at Target for 31 years, including a stint as EVP of marketing from 1995 until 2000.

“I'm the third head of marketing in [Target's] history,” affirms Jones. “The first two had absolutely amazing imprints on the brand.”

He says modern CMOs are disappearing quickly because they are usually brought in charged with fixing a troubled business by “relaunching the brand with new advertising.” But he believes “nothing about that is the case for Target.” Because of this, Jones is anticipating a longer tenure than what has become the norm. “We have an incredible strategic road map over the next five years,” he says. “We've got a great healthy business and brand. So that either means ‘uh-oh, what do you want to do?' or ‘congratulations, it is not a crisis.'”

Role of a modern CMO
Jones will draw on his experience as EVP of global marketing and CMO at Gap and spells at Coca-Cola and ad agency Leo Burnett to inform his tenure.

He joined Target from another agency, McKinney, and wasn't particularly looking for a new challenge when Minneapolis came calling. He and his family were settled in North Carolina and McKinney was thriving after it had been bought back from holding company Havas in 2008. (McKinney subsequently sold to South Korean ad firm Cheil Worldwide in July 2012.)

The two factors that persuaded him to move were his wife and his new boss, Target CEO Gregg Steinhafel.

“Target is one of those brands I benchmarked for two decades and it's one I can't keep my wife out of,” he says. “In an early conversation with Gregg, he asked me ‘Who is your successor and what's your legacy going to be?'”

Continuity of management, leadership, and development of teams is such a part of the culture at Target that Steinhafel wanted to plant in Jones' mind that the CMO role was not about coming up with new ads.

“It is about this brand at 50 years old and $70 billion in sales with an aspiration of being $100 billion in sales by 2017,” explains Jones. “They are intimidating thoughts, but they were so important to demonstrate to me the way the culture works.”

For Jones, Bob Ulrich, long-time CEO of Target, and Pellegrene were the ones who understood that competing on price alone wasn't enough: “We had to create this value proposition of Expect More. Pay Less.”

Francis, who Jones is following, spent 26 years at Target and is credited with carving out a uniquely creative “cheap chic” niche for the brand that attracted low- and high-end customers in equal amounts.

“We're embracing that value proposition and I can't go back on this creative ethos,” says Jones. “But I intend to modernize what marketing means to Target.”

A modern marketing team

Target's weekly ad newspaper is updated with the latest deals at the retail giant.

In the past, Target had separate teams for traditional media, digital, events, and PR. These have been brought together under seven different units that report directly to Jeff Jones, Target EVP and CMO.

Paid, earned, shared, and owned media (PESO) operate under one leader, SVP of brand and category marketing Shawn Gensch, with the belief that the more they're integrated the more powerful and amplified the message.

VP of communications Dustee Tucker Jenkins reports to Gensch and last month, Jones recruited Todd Waterbury as the retailer's head of creative to lead a several-hundred person in-house team.

Another direct report, Susan Kahn, owns communication and reputation management. And Chuck Herrig oversees Target's weekly Sunday newspaper ad, still its single biggest marketing vehicle. “That's an integrated team from strategy through execution,” says Jones. Loyalty and direct mail, including email, receipt marketing, and thinking about social channels is headed by Bonnie Gross.

Todd Marshall is SVP of marketing operations. “His team handles everything from in-store marketing to managing our team in Bangalore, India,” says Jones. “It covers our insights group – the business intelligence and analytics that drive marketing and merchandising.”

Carving out a legacy
Jones wants his legacy to be defined by this modernization, the mix of PESO that is revolutionizing marketing – paid, earned, shared, and owned media.“In the future, everything will be driven by mobility and transparency,” adds Jones. “The value of an earned impression will be more than a paid one. We have to move from campaigns to content. We need to evolve the way we market this brand to take advantage of all the tools we have to connect more to our guests.”

He cites the deal with Neiman Marcus that hit stores last year as an example. Prior to this, Target's biggest partnership was with fashion house Missoni, which generated 1.9 billion earned impressions in total.

The Neiman Marcus promotion produced 2.5 billion earned media impressions before the product even hit stores: 3.1 billion in total. “I started thinking ‘what would it cost to buy those impressions?' and ‘what's the quality of those impressions?'” adds Jones. “Some people say a paid impression is worth more because I control the message and delivery, but the value of an earned one is worth more because it is an authentic connection.”

Jones believes people will choose whether or not to share content around the brand and that it will be largely peer to peer. “Those things are really powerful,” he points out. “Our paid investment works very hard for us and we do a lot of advanced analytics to continually optimize our media mix, but in the context of our strategic road map over the next five years, I need to build an organization that creates content that's worth sharing and gives me leverage against the paid investment.”

As far as PR is concerned, Jones sees it as an “incredibly strategic communication tool” that sits at the center of the content creation world Target is moving to. He cites the retailer's A Bullseye View blog, which is fast becoming a content creation engine for the brand.

The blog features behind-the-scenes material, recipes, lifestyle marketers, and strategic partners such as Giada De Laurentiis, Liz Lange, and Sonia Kashuk. “It's a chance to create content regularly that's completely independent from an advertising campaign,” explains Jones.

He rejects suggestions that content is going to be compromised if it's coming from a brand because eventually there is going to be a conflict of interest. “That could be true for some,” says Jones. “But Target's guest base says over and over ‘I love Target,' refers to us as ‘My Target,' and is thirsty to learn more about what we do.”

Covering all bases
The brand also ranges from issues surrounding healthcare reform in its pharmacy business, to financial services in its REDcard, to the Neiman Marcus partnership, to launching a Taylor Swift album, to consumer electronics, to toys. “It's very broad and I am confident in our ability to tell stories to discrete guest segments and allow
them to engage more deeply,” says Jones. “Our guests want that and we're able to deliver it.”

A Bullseye View was the brainchild of VP of communications Dustee Tucker Jenkins, and she is very clear it is a Target site. “We're transparent that we're creating the content,” she says. “It's ‘behind the scenes at Target.'”

For Jones, this is the beginning of a new type of marketing strategy. He envisages a team that sits together, listening and creating responses in real time, and constantly publishing content. “Some categories will need more than others,” he adds. “We have to be nimble enough to know it's not going from ‘advertising everywhere all the time' to ‘content everywhere all the time.'”

This not only has implications for Target's in-house marketers and communicators, but also the agencies it uses and the way it deploys them.

Historically, Target has alternated between handling most creative in-house to having several agencies to using just one firm, which up until January 2012 was Wieden+Kennedy.

“Now, I want us to work with the best agencies in the world, whether it's PR, digital, creative, or events,” says Jones. “I want to work with them on assignments that are in their wheelhouse. I want to buy their best work. I want to pay them well – and I don't want to create artificial jump balls to make them fight with each other.”

“I want them to be inspired to work with us,” he adds.  “You don't work for us. It's such a collaborative place.”

Target's PR agencies include LaForce + Stevens for fashion; Kaplow for home; Imre for reputation and blogger engagement; Hill+Knowlton Strategies for field support, grocery, and research and measurement; and Group SJR for multichannel work such as supporting A Bullseye View.

Target's agencies are also expected to collaborate with each other. “Some agencies are uncomfortable with that and some embrace it because it's part of their DNA,” adds Jones. “Over time we'll work with the ones that embrace it because that's how we're working.”

Ultimately, Target is consistent in its belief that marketing is a strategic driver of the business and it has invested accordingly over a long period of time. But the trend toward content does not yet sound the death knell for traditional advertising. Jones points out that Target's paid media investment is highly optimized and it works.

“We can't just cut off paid and hope stuff gets shared,” he says. “[Sharing] is the trend and we have evidence it is working for us, but I also know what happens to
traffic, trips, and the basket if I turn the weekly ad or broadcast TV activity up or down.”

Target is now figuring out the best way to measure earned, shared, and owned media in a way the retailer's C-suite will understand. On Facebook, Jones not only looks at likes and fans, but also what content gets published in the newsfeed, the sentiment when it is posted, and whether it is possible to aggregate fans, likes, publishing, and sentiment into a metric.

“We have to get our arms around it because no marketer today wants to say ‘it just works,'” he adds.

Giving back

“When it comes to giving back, it has to be authentic, especially when you are talking about reputation and community,” says Target EVP and CMO Jeff Jones. “If it's not real you are going to be exposed really fast.”

Target's reputation for giving goes back to the retailer's roots under the Dayton family name and now results in it returning more than $4 million to communities every week.

“Our focus is education and sustainability,” explains Jones. “When you allow people at the point of sale with their REDcard to give back to their school or you go into an underprivileged neighborhood and rebuild the library and give every kid 20 books to take home, it's important – it's not just an initiative.”

Laysha Ward, who runs the Target Foundation, focuses on how the retailer can bring together community and reputation for the good of both. “We commit to it in a way that would be hard to argue we are just faking,” says Jones. “It's so embedded.”

Learning from failure
In terms of proving the value of marketing to Target CEO Steinhafel, the aim is to create customers and drive profitable growth in three ways: drive traffic to one of its assets – a store, site, or app – deepen engagement with consumers, and strengthen their love for the brand.

“All three of those are important. We've got a lot of metrics on what traffic means, how it turns into conversation, and conversion into basket,” explains Jones.

Love for the Target brand is a more imperceptible measure. “Love, by definition, is how we make you smile and tell people you love Target and there are going to be times when we can measure that and times we can't,” adds Jones. “We're comfortable with that.”

So while Jones is cognizant of the marketing heritage and longevity he has inherited from his predecessors, he also realizes Target is just at the start of a revolutionary process – and he is prepared to try things and fail rather than play safe all the time

For example, despite the exceptional buzz its launch attracted on the Web, mixing the high-end, whimsical appeal of Neiman Marcus with the cheap-chic philosophy of Target was an ambitious move that didn't receive universal approval – stock didn't fly off shelves in the way Steinhafel predicted to analysts and from January 1, 2013, could be purchased for 70% off.

Target's Jenkins says the retailer doubled the amount of inventory it ordered for the collection and did slightly overestimate demand, mainly in an attempt to inject some excitement into the traditionally quiet post-Black Friday lull. It is an indication of the complex retail equation of inventory, price, and timing that marcomms plays a crucial role in navigating.

But she reinforces the fact that “design is a part of Target's DNA” and “will always be a core value.”

Target recently debuted an unusual marketing campaign under The Everyday Collection, a new approach that promoted ordinary groceries as luxury items.

It is all part of Jones' commitment to step out of the marketing comfort zone, take some risks, and not be afraid of failure. “I want to be comfortable saying, ‘It failed miserably, but here's what we learned' and ‘here's how that helps us on this journey to modernize what marketing means.'”

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