Jcp’s New Marketing ‘aya-cola’ Axes Small Ad Agencies, Hires Giant Y&r

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Having filled the marketing power vacuum created by JC Penney CEO Ron Johnson’s ouster, acting CMO Sergio Zyman proceeded to reverse much of what he’d been doing as Johnson’s principal marketing consultant. Specifically, he moved to replace small agencies – including Mother, New York, and Peterson Milla Hooks, Minneapolis – with Young & Rubicam, the world’s tenth largest advertising agency, with about $907 in revenues, Advertising Age reported April 24.

As Coca-Cola’s marketing vice president, Zyman became known as “the Aya-Cola” because of what Ad Age charitably called “his intense management style and fierce temper.” Among marketers and advertisers, he’s best known for what became one of the greatest marketing blunders of all time (before his JC Penney work for Johnson, that is).

The Edsel of soft drinks

The announcement came 28 years and one day after Zyman’s best-known marketing accomplishment (if that’s the right word for it) – the introduction of New Coke, which both the soft-drink industry and Fortune magazine likened to Ford’s introduction of the Edsel.

For those of you too young to remember April 23, 1985, here’s how Wikipedia describes New Coke’s introduction and reception way back when:

Company headquarters in Atlanta started receiving letters expressing anger or deep disappointment. Over 400,000 calls and letters were received by the company…The company hotline, 1-800-GET-COKE, received 1,500 calls a day compared to 400 before the change. A psychiatrist Coke hired to listen in on calls told executives some people sounded as if they were discussing the death of a family member…Talk show hosts and comedians mocked the switch. Ads for New Coke were booed heavily when they appeared on the scoreboard at the Houston Astrodome. Even Fidel Castro, a longtime Coke drinker, contributed to the backlash, calling New Coke a sign of American capitalist decadence…

Coca-Cola executives announced the return of the original formula on July 10, less than three months after New Coke’s introduction. ABC News‘ Peter Jennings interrupted General Hospital to share the news with viewers. On the floor of the U.S. SenateDavid Pryor called the reintroduction “a meaningful moment in U.S. history.” The company hotline received 31,600 calls in the two days after the announcement.

History repeating itself?

Zyman, says Ad Age, has a history both of “shak[ing] up [ad] agency relationships” and, paradoxically, of returning to large agencies he likes. Both factors may have been at work in his selection of Y&R.

Before Johnson’s new broom swept them away from doing JCP’s advertising, their agency was Saatchi & Saatchi, New York, where Tony Granger ran the creative work on the account. In 2007, he left Saatchi to become global chief creative officer at Y&R, where he’ll now be overseeing the creation of JCPenney advertising again.

“I was very close to JC Penney, and was part of a team that was focused on making JC Penney a ‘lovemark’ with middle America,” Granger said at the time. Under his watch, Ad Age says, “the brand ditched its stodgy advertising for sophisticated, cinematic spots shot by top directors,” including a campaign that reenacted scenes from classic films.

Learning from experience?

Zyman also has a history of learning from his  mistakes. Only 11 days after New Coke’s disastrous introduction, he started working on plans to bring back old Coke. That, plus his introduction of Cherry Coke the same year, repaired the havoc that his New Coke introduction had wrought in the marketplace.

“Sergio Zyman and his team are working on a solid plan for success,” Young & Rubicam CEO David Sable told Ad Age. “Tony Granger and I and the whole team look forward to helping JC Penney as they write a great new chapter.”

Let’s hope that “great new chapter” doesn’t turn out to be another New Coke.

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