When the call came from Ford Division in 1998, Jan Klug already was on the top of the marketing world.
By age 38, she had been a senior account manager at advertising agency Leo Burnett USA on brands such as Pillsbury, McDonald's, Oldsmobile and Hallmark.
Yet for Klug, who ditched her dolls for dirt bikes at an early age, the offer to join Jac Nasser's marketing revolution at Ford Motor Co. was intriguing.
'When I looked at the opportunity to join Ford, I felt like it was a huge marketing challenge for me because, in many cases, Ford was not really known for its marketing,' Klug says. 'In my view, (Ford's) marketing really never lived up to what the product was all about.'
Klug's accomplishments at Ford have led Automotive Marketer to name her Marketer of the Year. Co-runners-up are Mike McEnaney, OnStar's executive director for sales and marketing services; Finbarr O'Neill, Hyundai Motor America Inc.'s CEO; and Liz Vanzura, Volkswagen of America Inc.'s director of marketing and advertising.
After 21/2 years as Ford Division's marketing communications manager, Klug is overhauling Ford advertising. Her unconventional advertising for the Focus changed the image of Ford's small cars from 'old, slow and dorky,' in her words, to youthful and hip. She persuaded many of Ford's independent dealer advertising groups to use factory-provided advertising. (See story below.) And she is devising an ad strategy for the 2002 Explorer following this year's Firestone tire recall.
During Klug's tenure, Ford Division has seen a 3.8 percent increase in U.S. cars and light truck sales from 1998 to 1999. The division is up 2.7 through November this year.
A `radical marketer'
Jim Schroer, Ford's vice president of global marketing, says: 'Jan Klug is a radical marketer; she's a new style of marketing leader and she's impacting not only Ford Division but the whole company.'
Schroer compares Klug - who majored in clarinet performance at the University of Illinois - to the perfect orchestra conductor. Schroer says Klug operates differently than traditional automotive marketing leaders. He said she encourages participation and 'makes the guy playing the bassoon to the woman hitting timpani feel like they're the kings and queens of the show.'
Klug, the granddaughter of a Chicago-area Ford dealer, has helped to transform Ford Division advertising from a conservative creative and media entity to an organization willing to take risks. Even Ford's relationship with longtime agency J. Walter Thompson of Detroit has changed.
'J. Walter Thompson had a desire to express themselves creatively that wasn't always accepted or embraced here (at Ford Division),' Klug says.
`New sense of freedom'
Bruce Rooke, J. Walter Thompson's chief creative director on Ford, agrees.
'The new emphasis on marketing at Ford has given Jan and the agency a new sense of freedom that we can operate within,' Rooke says. 'She challenges us. She can see merits in an idea that might scare people to death; Jan can be appropriately brave.'
She had her first chance to prove that point with the launch of the Focus in the fall of 1999. Instead of appealing to the fortysomething consumers already buying its predecessor, the Ford Escort, the Focus brand team decided to market the car to 18- to 25-year-olds.
J. Walter Thompson proposed 'live television,' and the division accepted. The Focus ads featured actress Annabelle Gurwitch talking about the Focus on live TV with humorous lines. Print ads and TV spots directed consumers to a Web site where they could vote on everything from Gurwitch's lines to the location of the next shoot.
'I had license to be exotic. The feedback from our dealers was `That's kind of strange; it seems very risky',' says Klug, who took criticism outside and inside of Ford that the ads weren't spontaneous or different.
The ads were a strong break with tradition, Schroer says: '(Live ads) just weren't Ford. (The old) Ford was `Here's the 30-second television commercial that tells you about two benefits of the new car and sings a song at the end.' '
Surrounding the consumer
Klug says Ford surrounded the consumer with Focus messages, from sponsoring Ricky Martin concerts to putting 120 custom-colored Focuses in the hands of youth opinion leaders. Ford gave Focus a strong launch, spending $43 million in measured media from September to December 1999 and $48 million for the first half of 2000, according to Competitive Media Reporting.
Presently, 25 percent of Focus buyers are between ages 18 and 25, while 22 percent are between ages 26 and 35. Focus buyers have a median age of 39, compared with a median age of 44 for the Escort. Sales of the Focus during the first 10 months of 2000 were just 0.2 percent above Escort sales for the same period in 1999, but the Focus is attracting buyers without the deep discounting that moved Escort models.
Klug says Ford had 'smart advertising' but 'we didn't have a soul of who we were.
'Focus has laid the groundwork (for a new marketing strategy) and put a lot of the brand teams on fire in terms of their creativity,' Klug says.
Even Ford's rivals are noticing.
Bill Ludwig, chief creative officer of Campbell-Ewald, Chevrolet's advertising agency, says: 'There has been a noticeable change in the attitude and tone of voice in their truck stuff; it seems as if they are pushing the work farther than Ford typically pushes.'
Lots of challenges
While marketing the Focus put Klug on the map within Ford's marketing organization, there were more challenges ahead. Take, for instance, Ford's desire to keep marketing costs down while its sport-utility nameplates went from two to five.
Since sport-utilities have many common attributes, Klug and J. Walter Thompson put all of Ford's sport-utilities into a single campaign with one tag line, 'No Boundaries.'
' `No Boundaries' was a recognition that we couldn't support each of the nameplates separately and that we needed to do something jointly,' says Klug, who added that individual sport-utility nameplates are promoted only when they are launched.
Half the spending
Schroer says Ford is spending half as much on sport-utility marketing under 'No Boundaries' as it would have if all five nameplates were marketed individually. Ford spent about $114 million on sport-utility advertising in 1999, according to Competitive Media Reporting.
Klug's biggest test could be in February, when Ford launches its 2002 Explorer six months after the Firestone tire recall.
Klug's strategy has been to get the new Explorer in front of the public in order to 'restore the brand now' and 'neutralize' the Firestone controversy before vehicles reach dealerships in early 2001. (Related story, Page 4.)
Klug, who was part of the executive team that met with Nasser every day on the Firestone issue, says Ford benefited from being quick to communicate with consumers after the crisis broke.
Klug says developing Ford's strategy on the 2002 Explorer has been a balancing act between 'expressing the facts and coming off as being defensive' in light of the recall. New ads will emphasize new features, particularly safety features such as the lower center of gravity and side airbags, while appealing to emotions.
Another balancing act has been working with the media community. Klug says the division's overall marketing budget will increase about 20 percent in 2001 over 2000. But most of that increase will be spent on nontraditional media and regional marketing efforts.
Cutting network TV
Klug sees network TV spending continuing to go down except for spending in network sports programs. Ford Division's spending on network TV went from $247.2 million in 1998 to $241 million in 1999. Despite the 2.5 percent decrease, that was the largest outlay for any automotive brand.
Klug's doubts about network TV - and other traditional media - haven't made Klug popular among Detroit's media community. In fact, TV and magazine salespeople have said that Klug is not as accessible as her predecessors were.
'If we had something really hot, I'm a lot more likely to go to GM or Chrysler with it than Ford Division; Jan Klug needs us as much as we need her,' says one network rep.
Klug sees Ford Division increasing its spending in spot TV, targeted cable, Internet and event marketing while maintaining its spending in magazines. Outdoor spending will decrease as Ford picks several long-term contracts that expire this year.
What's next for Klug? Schroer believes there is no doubt that Klug will rise within Ford Motor Co.
Says Schroer: 'She's definitely not done yet; there's very good opportunity for Jan to move up and join the senior echelons of Ford management.'