Joe Perello was appointed Chief Marketing Officer of New York City by Mayor Michael Bloomberg this April, and by September he had signed a $166 million sponsorship deal with Snapple.
He began his marketing career at, and spent 10 years with, MBNA, the credit card company, where he learned about the emotional allure of sports marketing and the power of direct marketing. He has worked for other well-known brands, including the New York Yankees and David Bowie.
I recently had the opportunity to talk to Joe about his work with the Big Apple to learn how to leverage a brand asset.
Young: How is marketing organized at the City of New York?
Perello: The Mayor appointed me to generate revenue through marketing vehicles, commercial means primarily. And, basically, marketing means growing jobs, growing tourism through marketing.
So our approach to this challenge is to first identify what marketing assets we have. What does it mean that we're in New York City if you're also a marketer or if you're an advertiser? What do we have that you would care about?
New York City is a brand. Actually, it's a great brand. The Brand Asset Value ranks New York City 13th among 2,400 different brands with respect to its richness and imagery.
What it doesn't have is a way to represent itself the way other brands do. There's no official trademarked logo or set of logos or marks for New York City. Now there are logos that come underneath the City of New York, and that would be the Fire Department, the Police Department, which have been recently registered. The Parks Department has a beautiful maple leaf. There are other marks that the City has that it either owns or will own. And those are the sub-brands underneath the umbrella brand of New York City.
So you could put all those things into the intellectual property bucket. Logos, trademarks, copyrights… all the things that New York City means in someone's mind.
Then there are physical marketing properties, things that we have or things that we can do for someone. We own an enormous amount of media. And the lion's share of it is outdoors, in bus stop shelters, phone booths, ferryboats, and light poles, and various ways to affix signs.
Up until now, we've never really controlled any of that media or kept any for ourselves. We simply allowed Viacom or Clear Channel to build it, clean it, sell it, and then we would take a small percentage of what they made. And, you know, that may work for a smaller market where it costs too much money to build a bus stop shelter, but when you're talking about the Super Bowl of outdoor markets that mid-town Manhattan is, that investment is tiny. It's a tiny little investment compared to the return you're going to get on selling the ads on bus stop shelters.
So, we have this very large media empire that we're centralizing.
We also have other ways to communicate. We run promotions, we run events, all previously decentralized. And our job, after we've identified these things, is to centralize them into one place and package them in a way that corporate partners will care about. The assets, the rights, and the authority—all companies have these centralized in one place, but the City of New York has never centralized in one place.
So we centralize all of that. You can compare us to a sports league that has rights centralized, or the Olympics, or even Disney. All their rights… if you want to do something with Disney, you've got to go one place and you can't do a deal with Snow White. If you've got to do a deal, you deal with everyone. So, centralization is really important when you're talking about valuable assets.
Throw on top of that the broad appeal of the City of New York as an idea, as a way of thinking, as an attitude, and you've got a very large, powerful, emotional property that can help sell more soda, can help sell more insurance, or cell phones, or whatever you happen to need to sell at the moment.
And it can do so in a way that helps the city run better. That's what really our challenge is. Our challenge is to craft corporate partnerships that live on about six different levels. The first level is an association with the brand New York City. That association may be through the city as a whole or just with the NYPD or FDNY or Corrections or Sanitation or the Parks Department or Education. Or it could be all of them.
Number two is community service. What can you fund, what can you be involved with that will help the City run better? How can you fund the graffiti removal program and get credit for it? How can you help the Administration for Children's Services recruit foster, recruit mentors? How can you do what you do and help the City run itself better and at the same time enhance your brands?
The third area that we have is communications. How do we communicate that message, how do we provide the partner with a way to communicate that message to New Yorkers and, in fact, the world? And that's where our media comes in, the city media. We own television stations, we own Web sites, we own outdoor media, we own ferryboats, we own streetlamps, we own many other ways to communicate with people that we're going to centralize and offer to, as support, you know, our corporate sponsors, and the initiatives that they undertake with the city. Those also include unpaid ways to communicate.
The fourth area that these partnerships live on is through cooperative marketing. What can the partner do to help the city achieve its goals? So, what can the partner do to help increase our own brand, in this case it would be tourism, and having the partner increase its brand at the same time?
So, how do we cooperatively market (and a perfect example is the way MasterCard promotes baseball)? Baseball is a property just like we're a property. They have a partner that pays them fees for certain things, and at the same time they activate their association with baseball by creating beautiful, lovely, romantic television spots and they run them, you know, all day long. MasterCard's brand is elevated and major league baseball's brand is elevated at the same time, and major league baseball didn't have to pay for it because they're not in the business of marketing, they're in the business of baseball. MasterCard is in the business of marketing. It's a great relationship; it's one that we look at very closely.
Another great relationship is James Bond and BMW. And these are all cooperative relationships that harness the power of corporate marketing and, at the same time, enhance the brand.
The fifth area that these deals can live on is licensing. How can we, together, with our partners, create properties that live in a retail location? So how can Reebok or Nike or Adidas create the perfect shoe or boot for the fire department or the police department and that boot or shoe is customized for that specific job activity in the same way that Reebok customizes Shaq's shoe for what he does?
How do we create a performance apparel program for cops and firemen? They have specific needs. Is the hat the right hat? I mean, is it functional, does it work? Do the cops care about it? You know, it's got to live and breathe so that it makes cops fight crime better. What are the undergarments that they wear? How do they live? How do they work on the side? Do they work? Do they care about these shoes? So, these are all ways in which our corporate partners can grow their own businesses by growing our business.
The final area: the city spends billions of dollars a year on products and services. How can we spend that money at appropriate rates, at competitive rates with our partners?
Those are the six areas that really we're working on to crack.
Young: That is a tall order—but fascinating, because you really are breaking new ground and pushing the envelope with the power of a brand that has perhaps never fully realized its power.
Perello: Yes, we are. And the challenge for us, you hit on this, is getting everyone inside on board. And that means all the city agencies.
Most have breathed a sigh of relief when they realize that there's going to be someone in there helping them market. So, you know, our first order was to get out to everybody, meet them, talk to them, understand what they do, understand how we can help them, and understand the programs that they need funded and that other corporations would find valuable.
So, History Channel may care about restoring monuments in Central Park. KeySpan might care about beautifying streets by installing gas lamps, like old-style gas lamps. Nike wants to live on tons of different areas. The beverage companies really want to be associated with health. Reebok wants to help the City get in shape, because there's a problem with obesity. Nationwide, there's a problem with obesity. So, this may be a great idea for a Reebok or a Nike or an Adidas. And instead of just selling the official this or the official that which will live in a press release and perhaps live in some sort of campaign, we're packaging up a real, hard, tangible assets and delivering them to a sponsor in way that the sponsor wants them.
The other thing that we're doing is writing down everything. Because we know this has to live past us. We have to write this as if we're writing law, because it has to succeed on policy and process.
Young: You had said that many of the internal departments with their own assets have breathed a sigh of relief that someone is finally going to help them and make them more effective. But what challenges have you faced?
Perello: We are encountering challenges, but they're basically challenges that are really only because we just got appointed. Everyone sees that we can make way more money together than we can alone.
It's perfectly displayed in the great business model of the National Football League. Every individual team pooled their television rights to the league, and the league went out and crafted a very large television agreement. Now that agreement, as you probably know, has developed into the largest television agreement of any sports league. The only thing that compares to it is the Olympics. It's helped create the Super Bowl, which is the largest single television event in history. And that's basically the model for us.
Young: Now why do you think it's taken this long, or why do you think it's taken Mayor Bloomberg to make this change, to see the potential?
Perello: I don't know why it's taken this long. I can't answer that. But I do know that Mayor Bloomberg absolutely, positively is applying his years in business to how the city sees itself. And my mere existence, because I'm here as a Chief Marketing Officer, is a result of his and Deputy Mayor Dan Doctoroff's—another private businessperson—understanding that the City has an enormous amount of assets, larger than even what's been reported.
It's way larger than the official soda. That's important, but it's way, way larger than that. And I think they knew that there was something out there and they found some guys who sort of did this for a living and said, yeah, there's tons of assets out there, let's just start with the easy one, which is outdoor media. Even if we were Kansas City, this model still works, if we have the media centralized.
Young: Are you short-term focused now, or would you say you're looking at a longer-term horizon?
Perello: That's a really great question. I am trying to do both. What I'm trying to do now is I'm trying to do five basic things at once. Number one is understand what the assets are and document them.
Number two is hire people that can help me be 10 people.
Number three is try and craft deals, partnerships that, while they may not be the $100 million deals, are set up in a way that helps people understand what we're doing. I want to craft deals that have those six areas involved, so that they can really understand what we're doing.
And then the fourth thing is crafting the longer-term deals. And then the fifth thing is how do we activate all of those deals so that our corporate partners can talk about us.
Young: Is the “I love New York” campaign an asset?
Perello: It's a state-owned trademark. It's not a logo, it's not a tag line, and it's not an ad, but it's all of those things at once. So, it is a very, very, very creative way to say something.
Young: How are you measuring your successes?
Perello: Revenue. Direct revenue to the city. Paying for worthy programs that should have been funded and getting media dollars spent on our behalf in places that we can't.
Young: So it's hardcore accountability, direct revenue?
Perello: Yes, and it's the easiest part, for me.
Young: What's the most difficult part?
Perello: The most difficult part is staying focused. Because, for a marketer, it's the greatest job I think I'll ever have. And sometimes you say, what am I doing with my life? I'm selling something. Okay, that's great. And I always come back to the fact that what I do makes jobs. By far, the greatest thing anyone can do is create more jobs, because it solves an enormous number of problems.
