Marketing Campaign Case Studies

Monday, February 11, 2008

SEINFELD CAMPAIGN

OVERVIEW
Although the American Express Company (AmEx) had built its brand on an idea of exclusionary ‘‘membership,’’ its elitist image proved a weak spot in the 1980s and 1990s, when competitors such as Visa and MasterCard eroded AmEx’s market share by positioning themselves as more convenient alternatives. One of the AmEx marketing moves meant to counteract the company’s outdated image was enlisting the comedian Jerry Seinfeld in 1992 as a collaborator on TV commercials that reproduced the observational comedy of his stand-up routine and of his NBC sitcom Seinfeld, which at the time had a devoted but comparatively small viewership. As Seinfeld became increasingly popular, AmEx heightened Seinfeld’s role in its marketing. Between 1995 and 2002 the comedian was a centerpiece of the credit-card giant’s American marketing efforts.
In one spot Seinfeld was shown foiling, thanks to his AmEx card, a gas-station attendant who wanted to inconvenience him by failing to stop the pump at exactly $20. This focus on humorously trivial acts was characteristic of Seinfeld’s comedy, but the tone and content of the commercials represented risky new territory for American Express. Seinfeld’s intelligent and accessible persona helped the card-issuer bridge generational divisions and position itself as suitable for use in unglamorous hubs of daily life, such as grocery stores, without undermining the upscale image it had spent so many years creating. The cost of retaining Seinfeld and of running the commercials was not disclosed, but the comedian was, at the peak of his popularity, one of the highest-paid TV stars, and his AmEx spots often debuted on Super Bowl broadcasts, the most expensive of all advertising forums. American Express annually spent about $300 million advertising its credit cards.
The commercials were well received by consumers and ad-industry critics; they were consistently named among Adweek ’s monthly Best Spots in the late 1990s, and the ‘‘Gas Station’’ spot won a Silver Lion at the Cannes International Advertising Festival in 1997. Seinfeld was a central part of AmEx’s long-term brand repositioning, a project that paid intermittent dividends during the years of the campaign’s run. Seinfeld and AmEx further collaborated on a well-received online campaign in 2004.

HISTORICAL CONTEXT
Beginning in the 1960s American Express distinguished itself for two decades with several highly acclaimed campaigns. Advertising Age included two 1970s American Express campaigns (‘‘Do You Know Me?’’ and ‘‘Don’t Leave Home without It’’ featuring Karl Malden) on its list of the ‘‘50 Best Commercials.’’ The 1988 print campaign featuring photos of famous card members by Annie Leibovitz was a finalist for the book Advertising’s Ten Best of the Decade 1980–1990.
But in 1990 AT&T Corp. disrupted the generalpurpose credit-card market by introducing its Universal Card with no annual fees. The move adversely affected American Express, which relied on annual fees for much of its revenue, for two reasons. First, American Express was not a credit card but rather a charge card that had to be paid in full monthly, and so it did not earn interest by extending credit. Second, American Express collected on average 3.22 percent of the transaction, making Visa a much more attractive card for merchants to honor, since it charged about half of this percentage. CEO James Robinson III attempted to salvage American Express by turning it into what Time magazine called ‘‘an unwieldy financial supermarket.’’ In 1993 the board of directors replaced Robinson with Harvey Golub, who streamlined the company by severing the brokerage, investment-banking, and life-insurance divisions. Golub’s tactics turned the company around in short order. Spending on American Express cards increased by 15.6 percent in 1996, outpacing the 13.4 percent rise for credit cards overall (exclusive of debit transactions and cash advances). And in the first half of 1997 American Express finally reversed its decadelong downward trend in market share, rising from 18.3 to 18.9 percent of the $469 billion credit-card market.

TARGET MARKET
The Seinfeld commercials were part of a larger AmEx effort to counteract a damaging perception that the brand was the elitist province of older, wealthy consumers. To broaden its card-holding base AmEx needed to reach younger consumers, who tended to remain loyal to their first credit-card brand, but it was also important that the company not alienate those who had been drawn to AmEx’s long-cultivated aura of prestige. Seinfeld was a key figure in this brand repositioning beginning with his initial involvement with AmEx in 1992. The comic’s ironic, urban-inflected sensibility attracted a devoted following among young consumers, but his value to the company became increasingly evident in the following years, as his eponymous sitcom achieved a level of popularity that transcended demographic divisions. Even as Seinfeld became universally known and appreciated, Jerry Seinfeld’s hold on younger, hipper consumers remained strong. His persona was that of an intelligent yet accessible and self-effacing everyman. He thus emerged as a spokesperson who fit neatly with the AmEx imperative to broaden the brand’s target market without alienating its existing cardholders.
Seinfeld’s centrality to AmEx’s advertising increased in concert with his celebrity. As of 1995 Seinfeld was well on its way to becoming perhaps the defining TV sitcom of its era, and the comic became one of the chief elements of the wider AmEx marketing effort tagged ‘‘Do More,’’ a branding campaign that was intended to extend the ongoing redefinition of the company’s image. AmEx’s other primary spokesperson during this time, the young golf phenom Tiger Woods, likewise contributed a uniquely inclusive aura to the brand. As a 21-year-old of mixed ethnicity, Woods appealed to young people across ethnic lines, but his overwhelming mastery of a Comedian Jerry Seinfeld
sport closely linked with older, moneyed consumers likewise won him respect from many established AmEx customers.

COMPETITION
While American Express’s market share was rising in the first half of 1997, to 18.9 percent, Visa’s was falling slightly, from 48.88 to 48.85 percent. Visa nevertheless dominated almost half of the market, with about 600 million cards accepted at more than 14 million locations worldwide. This made American Express pale in comparison, with 42.3 million cardholders able to charge at 5 million locations worldwide. In an attempt to make its numbers more competitive, American Express lowered the average percentage of the fee it charged merchants on each transaction from 3.22 percent in 1990 to 2.74 percent in 1998. The discount increased merchant acceptance of the card. In a 1997 survey cardholders confirmed that they could use their cards at 92 percent of the locations where they wanted to shop, up from 72 percent five years earlier. These statistics substantiated the portrayals in the commercials of Seinfeld charging gas and purchasing single stamps. But Visa still charged merchants a fee of less than 2 percent, allowing the front-runner to claim, ‘‘It’s everywhere you want it to be.’’
American Express edged out its main competition in the corporate and small-business markets, where it controlled a 65 percent share. Consistent with its image, American Express cardholders tended to be bigger spenders, charging on average $6,000 yearly in 1996, compared with Visa’s per-card average of $3,200. Consumers tended to use their American Express cards for higherpriced purchases, such as travel and entertainment. They also, however, tended to rack up a much higher volume of charges on competitors’ cards on day-to-day spending. The use of debit cards, which drew directly from checking accounts and thus worked well for this kind of spending, increased by 75 percent in 1996. University of Maryland economics professor Lawrence Ausubel predicted that consumer spending would bifurcate between the extremes of immediate payment (debit cards) and extended payment (credit cards), emptying the middle ground of charge cards with monthly payments in full that represented American Express’s traditional arrangement.
In fact, exclusive agreements with Visa and
MasterCard barred major banks from joining American Express to offer debit cards and make other arrangements, a case that was contested in federal courts. Internationally, American Express established relationships with banks that benefited both.

MARKETING STRATEGY
Ogilvy & Mather creative director David Apicella had first noticed Seinfeld as a promising stand-up comic in the 1970s. In 1992, acting on a hunch, Apicella hired Seinfeld to endorse American Express, although the Seinfeld show was still in its infancy and not yet the pop-culture juggernaut that it eventually became. ‘‘When we started, he hadn’t quite reached the spectacular levels of success,’’ Apicella recalled. ‘‘He had kind of a cult following. But I thought he was a nice combination of being Everyman—and appealing to every man—and being insightful in his observations.’’ At first Seinfeld’s role was supplemental to the company’s brand advertising, and his minimalist spots simply mimicked his standup routine, with his material focusing on touting American Express. By 1995 Seinfeld’s role at American Express had expanded to include being the spokesperson for the general brand campaign.
The Seinfeld spots that appeared in those years imitated the plots of the eponymous sitcom that had become a part of the collective American consciousness, and like the Seinfeld show, they were crafted via brainstorming sessions, according to participants in the creative process. ‘‘We do it much like a sitcom is written,’’ Apicella said. ‘‘We just sit around a room for as long as it takes to get a funny commercial . . . Having spent however many days it takes to get the thing right with Jerry in the room, we’re usually pretty together, but we’re always changing things on the set.’’ Apicella continued, ‘‘Jerry does some ad-libbing, but things are generally scripted. Jerry’s commercials are done the way Jerry’s show is, which is done the way Jerry’s act was—[they are] carefully constructed beforehand.’’ One well-known spot, ‘‘Gas Station,’’ showed Seinfeld filling his car with gas, preparing to stop the pump at exactly $20, presumably because this amount would facilitate the cash payment he wanted to make. When the pump went slightly over $20, the gas-station attendant began to delight in the irritation the error would cause, but Seinfeld responded by giving the pump handle another gratuitous squeeze and victoriously producing his AmEx green card, which made the precise total of his purchase irrelevant. The humorously trivial nature of the comedian’s triumph was in keeping with his sitcom character’s personality, a necessary element of the campaign from the point of view of the TV show’s loyal audience. Additionally, the fact that AmEx was being connected with the commonplace act of purchasing gas was noteworthy. Typically associated with upscale travel and leisure purchases, AmEx had not, prior to the Seinfeld campaign, been regularly promoted as a card to be used for such mundane, unglamorous tasks.
Another prominent spot in the campaign, which made its debut during the 1998 Super Bowl, showed an American Express card being put to a similarly commonplace use, while further deriving humor from the small scale of Seinfeld’s personal triumphs. This time, however, the spot—set in a grocery store—literally juxtaposed the comedian’s character with that of Superman, who appeared as an animated figure. When Lois Lane, having forgotten her wallet, needed help purchasing her groceries, it was Seinfeld who was able to oblige, thanks to his American Express card. Superman’s costume, alas, had no pockets, limiting his ability to save the day. Although the last episode of Seinfeld aired in May 1998, Seinfeld’s relationship with AmEx continued; indeed, in the aftermath of the show’s end the public appetite for new Seinfeld material could only be satisfied via AmEx commercials. The Seinfeld campaign was put on hold during 2000 as AmEx relied more heavily on Tiger Woods and a more aspiration-minded iteration of its ongoing ‘‘Do More’’ message. A new batch of Seinfeld spots began appearing on TV with the March 2001 broadcast of the Academy Awards, and the Seinfeld campaign remained an integral part of AmEx’s television advertising through 2002.

KNIX TIX
In an underscoring of American Express Company’s affiliation with the New York Knicks, Michael Bay of Propaganda Films directed a 30-second spot titled ‘‘Knicks Tickets,’’ in which spokesperson Jerry Seinfeld brandished his American Express card to pursue his lost Knicks tickets from his limo to horseback to inline skates to underwater diving. The final frames, shot outside Madison Square Garden (because it was too expensive to shoot inside), showed Seinfeld in full scuba gear telling his date, ‘‘I’d have gone to the moon for these.’’ The spot ended on a two-shot of Seinfeld and film director and Knicks fanatic Spike Lee, in an astronaut’s suit, affirming, ‘‘Tell me about it.’’ Seinfeld performed his own stunts for the spot—mounting a horse, diving backward off a boat, and even in line skating for just the second time in his life.

OUTCOME
Adweek editors consistently included commercials from the ‘‘Seinfeld’’ campaign on their monthly list of the ‘‘Best Spots’’ breaking on broadcast and cable television, and ‘‘Gas Station’’ garnered a Silver Lion at the Cannes Advertising Festival in June 1997. Although AmEx began to make up ground against its rivals in 1997, it was locked out of the debit-card market by an agreement between Visa, MasterCard, and the banks that issued debit cards. Therefore, AmEx lost market share in 1998 and 1999. It reversed the trend by introducing its Blue Cards, which featured a microchip meant to store the consumer’s personal information to facilitate online purchasing—a feature that was not fully functional because it required retailers to use special equipment that was not then cost-effective or readily available. The microchip nevertheless effectively positioned the card as a hip, youth-focused accessory, the only credit card of its kind. AmEx attracted millions of new cardholders in this way in 2000 and 2001. The Seinfeld commercials were not used to pitch the Blue Card, but the card’s success marked an extension of the ongoing brand repositioning of which the comedian had long been an integral part.
The concept behind the 1998 Seinfeld and Superman commercial was revived in 2004 for a much-publicized pair of ‘‘webisodes,’’ five-minute films available for viewing only online. The comedian and the superhero passed their time together in much the same way that Seinfeld and his onscreen friends Elaine, George, and Kramer typically passed their time on Seinfeld. In the first webisode, for instance, Seinfeld and Superman made small talk in a diner, returned a damaged DVD player (thanks to an AmEx policy of replacing faulty merchandise within 90 days of purchase), and attended a lackluster Broadway musical about the state of Wyoming. The second webisode touted, among other AmEx attributes, the company’s roadside-assistance service, by showing Superman and Seinfeld stranded on a road in Death Valley. This Web campaign attracted more than 2 million visitors. Although ad-industry observers questioned its practical brand-building and product-promotion benefits, ‘‘The Adventures of Seinfeld and Superman’’ was widely considered one of the most innovative online campaigns of its time. Because of the campaign Adweek named American Express its Interactive Marketer of the Year for 2004.

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