How Five CMOs Tried to Boost Battered Brands in 2019

Date : 12/20/2019 @ 9:40PM
Source : Dow Jones News
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How Five CMOs Tried to Boost Battered Brands in 2019

Under Armour (NYSE:UA)
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2 Months : From Dec 2019 to Feb 2020

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By Nat Ives 

Five new CMOs began this year facing challenges that went beyond the usual, at Facebook Inc., Uber Technologies Inc., the National Football League, Chipotle Mexican Grill Inc. and Under Armour Inc. Here's what happened next.

Facebook

Facebook's earnings have soared throughout the controversies over its privacy and content practices, giving CMO Antonio Lucio room and resources for a strategic shift that could more than double the company's ad spending in two to three years.

"By being silent, by not reacting on time, people created a story around us evaluating who we are, why we do things and even the intention behind [our] leaders, he said. "So we needed to create a more proactive framework."

Mr. Lucio built a corporate brand system to distinguish the company from its consumer apps, began marketing those apps individually and rebranded them to make clear that Facebook owns them. "People around the world want to know where their products and services come from," he said.

In February, Facebook will bring its ad campaign for Facebook Groups -- which positions the platform as a uniter, not a divider -- to the Super Bowl.

Still, Mr. Lucio was faced with challenges in his first year as several problems worsened. Facebook and other tech giants became the subject of multiple federal investigations. Meanwhile, Sen. Elizabeth Warren and others hammered Facebook for not fact-checking the political ads it accepts. If elected president, Ms. Warren promises to break up Facebook, Amazon.com Inc. and Google.

The Facebook brand's net favorability score, a measure of consumer perception from tech survey company Morning Consult, fell again this year after declining in 2018.

The going is still early, Mr. Lucio said. "We tried to lay the foundation for what is going to be a five-year-plus journey."

Uber

Uber was already trying to put its problems behind it by the time Rebecca Messina came in as CMO in the fall of 2018.

Travis Kalanick had left the chief executive post more than a year before she was hired, following allegations against the company of failure to act on sexual harassment, theft of trade secrets, and mistreatment of drivers and riders.

But the work was far from done. "There certainly are some populations around the world who haven't forgotten or forgiven the company's mistakes from a few years ago, and that's completely fair," Ms. Messina said a few months after she was hired.

"We'll probably only be able to convince them through our actions," she said of the company's critics. "But I do think we have come a long way already, in both who we are and how people see us, and my job is focused on continuing that momentum and consistently expanding the meaning of what Uber stands for."

She didn't get the chance.

In June, CEO Dara Khosrowshahi announced Ms. Messina's departure after only nine months, eliminated the CMO role and called the brand still challenged. He soon cut another 400 people from the marketing department.

On other fronts, the company released a safety report to increase transparency in an area where it and other ride-sharing services have been criticized. It said it received 5,981 reports of sexual assault involving U.S. passengers or drivers during 2017 and 2018.

Uber also took steps toward putting allegations of sexual harassment behind it, settling with the Equal Employment Opportunity Commission after the agency found it had allowed a culture of harassment and retaliated against people who complained.

The company increased revenue in the third quarter, and Mr. Khosrowshahi projected that it would deliver its first full-year profit on an adjusted basis in 2021.

NFL

The National Football League hired CMO Tim Ellis in 2018 amid sliding ratings and controversy over player protests during the national anthem at games.

By some measures, the NFL is still recovering. Its net favorability score is improving but still below its 2017 level, Morning Consult said.

But audiences rose 6% through the season's 15th week ended Dec. 16, according to media metrics and research firm Nielsen.

The league settled the grievance filed by protest leader and former San Francisco 49ers quarterback Colin Kaepernick. And renewed acrimony over an attempted workout for teams that could bring Mr. Kaepernick back to play quickly faded from headlines.

Mr. Ellis said he restructured the marketing department to improve its competency in social, influencer and data-driven marketing. He tried to humanize players with a "helmets off" strategy that included social-media training to help them build personal brands. "That ultimately benefits the NFL brand," he said.

The league also hired content creators to keep social-media video and photos flowing.

Audiences for games on digital platforms are up 50% from a year earlier, the league said.

Chipotle

Chipotle continued to put distance between itself and repeated food-safety problems in prior years. The fast-casual restaurant chain introduced a nationwide loyalty program, emphasized delivery and called its new carne asada menu item a success.

CMO Chris Brandt said he also centralized marketing, pulled back on promotions and tried to make Chipotle more relevant in pop culture. "Driving culture may have been a little bit of a reach for us because of where the brand was, but hey, you certainly have to have some aspirations," he said.

Not all of the company's initiatives have paid off. There was a late-night push that didn't really work, for example.

But online sales grew 88% during Chipotle's third quarter, now accounting for 18% of business, while same-store sales growth of 11% beat analyst expectations.

Under Armour

CMO Alessandro de Pestel joined Under Armour in the fall of 2018, just before The Wall Street Journal reported on a corporate culture that female employees found demeaning, including strip-club visits on the company dime.

Founder and CEO Kevin Plank promised to do better, but 2019 delivered new bumps in the road for the sports-apparel company.

High-profile endorser Stephen Curry broke his hand early in the National Basketball Association season, sidelining him until at least the spring.

North American revenue declined 3.4% in the first three quarters of the year, compared with the period a year prior, and the company lowered its 2019 forecast.

"2019 marked another year of strategic and operational transformation for Under Armour," a spokeswoman said in an email. The company continued to focus on greater media efficiency and effectiveness, using consumer insights to inform highly targeted, high-return strategies, she said.

Under Armour plans to begin a global brand campaign in January.

Write to Nat Ives at nat.ives@wsj.com

 

(END) Dow Jones Newswires

December 20, 2019 16:25 ET (21:25 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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