reveries.com - doug mcmahon

NOVEMBER 2003

Just imagine the velocity of fifteen hours a day of live television, centered on the business day. It's like putting on election night, every day. It's something that never existed before. It's what Doug McMahon was thinking about when he left a high-powered post at JWT for a new frontier at CNBC.

Okay, so CNBC does what it does through the relatively traditional platform of cable television. Doug concedes that. "But," he appeals, "we're the eyes and the ears of the marketplace. We're one place where you can go to find out what the hell is going on -- on any of the exchanges -- literally anywhere around the world."

At the tender old age of thirty-four, Doug McMahon finds himself, as chief marketing officer of CNBC, at what is arguably the epicenter of the new economy. CNBC's got cable, it's got dot-com, it's got the markets, it's got global. It's got -- Maria Bartiromo. Not a big deal, maybe, at least not for a guy who at thirty-two was at the epitome of the old economy (sorry) as the youngest-ever evp at J. Walter Thompson. In fact, Doug had made his mark as the "youngest" just about everything at JWT before joining CNBC last July.

Just days after graduating from Georgetown University with a B.S./B.A. in Marketing, Doug went to work for Grey Advertising as an assistant account executive for the General Foods account, looking after breakfast cereals, Post Cereals. Within a year -- that would be 1989 -- he was made an account executive and another year later an account supervisor on the largest cereal businesses they had at that time, Post Grape Nuts and Fruit and Fiber.

Then in 1992 he left to go to J. Walter Thompson, as account director on Lipton Teas and Lipton Original. Doug wanted to get some beverage experience, some non-alcoholic beverage experience. He had it in mind that he might like to go back to Atlanta, where he had grown up, and work for the Coca-Cola Company. Thought he'd get some beverage experience.

Some kids are linked to their dads through baseball. For me, it is business.

But then at Thompson, things started to move quickly. He became the youngest vice president, and then the youngest senior vice president. He worked on all the largest assignments they had at Thompson in New York. He expanded the Unilever relationship. Took over Wisk and Lever 2000.
Worked on the "Lever 2000 Body Parts" campaign, the Wisk re-launch: "Don't Risk It, Wisk It."

For two years, he helped stave off the inevitable loss of the Kodak account to sister WPP agency Ogilvy & Mather. When Kodak left, Doug was moved up to become evp and global business director -- yes, the youngest ever. Was part of the team that pitched and won the Schick's business worldwide.

But now Doug was looking for challenges beyond the agency world. Joined an entrepreneurial venture called National Mall Network, an experiential marketing firm with plans to leverage a network of malls across the country as a marketing medium. It was a great concept that never quite got off the ground. Within a year, Doug was back at Thompson as executive vice president and global business director, in charge of business development for Thompson Worldwide.
And then, just a few months later, a peacock flew in over the transom.

Why did things happen so quickly for you professionally?

There were a few things. The fact that I was the youngest of eight children meant I had to be mature beyond my years just to be included. Otherwise, they wouldn't let me tag along or participate in the conversation.

My dad is very important. He was president and ceo of Royal Crown Companies, which was bought out when he was fifty, about 20 years ago. I was in high school at that time. I would come home after school and spend a couple of hours at the kitchen table talking with my father about business life. One of the areas where we connected, had common ground, was that I read all of the business publications. My dad is a voracious reader, and he instilled his love of reading as well as of business. So I was just exposed to things at an earlier age.

The third thing goes back to growing up in a big family. You have to learn a skill of listening and a certain skill of diplomacy. My dad once sat all eight of us down with my mom. He had us all break a toothpick around the dinner table. And then he handed out toothpicks again and had us all pass them down to him. So he had eight toothpicks from the kids, one from my mom and one from him. So it was ten toothpicks. Then he handed it to the next sibling. It went around the table and no one could break the ten toothpicks. He just made the point that sticking together and working together as a team always wins. That stuff just sticks with you.

You had a very big and important job at J. Walter, but you weren't there very long. What prompted the switch to CNBC?

I always knew the client side was where I wanted to go. I wanted to work in a fast-paced, very market-driven, topical place, a place with a certain level of velocity. I enjoy that. I thrive on that. I wanted a place that attracts a very diverse group of people, smart people.

I describe myself as organized creativity. That's really who I am. I love the creative environment, but I also bring a certain discipline and organization to it.

I received a call from a recruiter named Michael Levine. I'm thinking, okay, let me get this straight. This is CNBC. This is a global brand waiting to be built. This is a phenomenon unto itself. One of the next platforms they're going into is CNBC.com. Just as a consumer/viewer and marketing person, I had fifteen different ideas already.

So I met with Bill Bolster, CNBC's president. It wasn't quite like a Steve Jobs to John Sculley "do-you-want-to-sell-sugar-water or do-you-want-to-change-the-world" kind of a pitch. It wasn't quite that dramatic. But he basically said, "Sure you can run an agency one day, but that's not the big time." He pulled kind of a mano-a-mano thing on me and it worked brilliantly because I liked him, I thought I could learn from him, I thought I could bring a certain set of marketing skills to the table. I really believed in what he was doing.

In four years, Bill is really the guy who has built CNBC into this machine that it is. He recognized that the fifteen hours of live business day programming that we're doing is something people are just standing up and saying that they can't get enough of. We're playing a critical role in helping people have equal access to the market data and insights that heretofore were only available to a select crowd.

How would you describe the essence of the CNBC brand?

CNBC is about real-time access to market information. It's about insights that allow people to make decisions that can enhance their personal wealth. The access is key. We're leveling the playing field. The real-time nature is key. It's no longer okay to wait for the evening news. It's no longer okay to wait for the morning papers the next day. It's the right product and the right branded service, for our times.

It seems like CNBC is a financial news channel by day and a political talk show channel by night. How do you reconcile the two from a marketing standpoint?

That is one of the challenges we face. We have some very good prime-time programming, but your observation is correct. It does not match up with our business day programming. We're a live data information insight source during the day for fifteen hours. Ultimately, the brand will be built around that business day. As the markets continue to evolve with the electronic communications networks and extended trading hours, I could see our business day programming expanding.

As the world economies continue to become interconnected -- as the global economy continues to evolve -- I could see sometime in the future when CNBC could become 24x7, always available, always on the pulse of what's happening with anything that has to do with individual investing.

Because of the lifestage I'm in, I love the shelter books -- Architectural Digest, Veranda, Southern Accents. You salivate.

As a marketer today, we reconcile it this way: I want to talk about CNBC the brand as the business news, business insight, information source. However, I will still support from a marketing standpoint our prime-time programming. But that's more of the traditional model of driving eyeballs to watch that programming.

How will CNBC go about establishing itself as a global brand?

Right now we are a global brand in terms of being a global business. We're not a global brand in terms of the audacious goal of being mentioned in the same context as Coca-Cola, Sony, Virgin -- you pick the dirty dozen. We're in 140 million households. Seventy million are inside the U.S. and 70 million are outside the U.S. Just for perspective, about 59 million of those are in Europe.

So we already have a significant presence in terms of distribution. And we're working to expand that as Europe continues to find new ways to have an interconnected set of economies. There is going to be an overseas consumer -- both an individual consumer and an institutional investor -- for the products and services we are now providing domestically. That global marketplace already exists today, but it's going to become even more intense.

CNN is apparently following a global strategy of developing programming in local languages. Is that a path CNBC might follow as well?

Yes. We have relationships in several markets. We are looking for ways, in a very aggressive fashion to strengthen what I'll call our international products -- whether it's in Japan, Asia, Taiwan, India, Europe or Latin America -- to better serve our audiences there. We're exploring ways to strengthen that and developing programming in native languages is absolutely fair game.

Our international presence is part of our joint venture with Dow Jones. So it's a Dow Jones/CNBC service when you get outside of the U.S. We have a very formidable partner in Dow Jones.

You certainly have real equity in your affiliation with Dow Jones and The Wall Street Journal. But it doesn't appear that you leverage it all that much, at least from a marketing standpoint.

There are other ways we could leverage the relationship from a marketing standpoint. So I'll answer that two different ways. If you watch our programs with a critical eye, you'll see The Wall Street Journal all over. The Wall Street Journal reporters, The Wall Street Journal programming content -- however you want to characterize that. It's seamless. The Wall Street Journal is there throughout our fifteen hours a day of live business programming.

And then, if you'll note, during the day -- you have to be a devotee like me -- you'll see we reference WallStreetJournal.com and several of their different asset bases as places to go to continue or learn more about certain things.

I devour the business magazines like Forbes, Fortune and Business Week. I think Vanity Fair is just a fun, fun, great read.

But from a marketing standpoint, we really haven't been as aggressive as we were two years ago when the actual partnership was announced. There was a very thoughtful print campaign that was launched, that was extremely well-received. But it's been a great partnership and continues to be so.

You've got NBC, CNBC and MSNBC. Then there are the dot-com iterations. Now there's NBCi. Then there is General Electric. Are these various pieces supposed to fit together in any strategic way?

They are all different branded businesses. We have a very close content relationship with CNBC.com. And CNBC.com is all reconciled around business day content, individual investing and personal finance.

With the other businesses, it's a classic, product portfolio management strategy. MSNBC, is about news and stories -- the stories behind the stories. CNBC, for the most part, is about business news, information and insights. NBCi is a new amalgamation of Internet investments which really run a full gamut of different types of companies and properties that are all around -- it's such a bad misnomer today but I'll call it new media. And then you have the parent media company, which is NBC, the traditional network, which is about the very best in news and entertainment.

The benefit of having this product portfolio is that it gives us programming expertise that allows us to build very powerful relationships with interested constituencies. That's number one. And, number two, there are tremendous cross-promotional opportunities in having this kind of product portfolio. With all the dot-coms out there fighting for media space and airtime, it sure is nice when you have a terrific media asset base to promote your own brands and your own branded content.

How do you measure the success of the CNBC.com Web site?

CNBC.com is a very strong business right now. But it's relatively new, it's still in the ramp-up stage. The site was re-launched this summer and it's being fine-tuned and refreshed all the time.

We've also just brought in a new president, Pamela Thomas Graham. She and Bob Myers, who is the chief operating officer, and a fellow by the name of Chris Gulaki, who is the chief strategist, are leading the charge to continue to build up the user base. That's the first metric of success for a Web site or a dot-com product -- whether they are aggregating a large enough audience to establish a revenue stream -- however that business model is set up to succeed, an advertising-based one or a transactional-based one.

I like to build things. You know California Closets? Well, our house has the greatest closets. I built all of them.

So CNBC.com is still in phase one, where they're trying to build up and aggregate the largest audience with the current product form, even though that may be an evolving thing. They have a good enough product and the power of the CNBC brand to get people just that are interested in personal investing and personal finance to check it out. Once you check it out there are a number of personalization tools, things that you can customize around your personal finances in a very, nice intuitive way. That's ramping up very nicely.

Do you see the Web as more of an advertising medium, a transactional medium, or something else?

In absolute terms, the Web is the medium. It changes everything. We aren't even aware of where we are in the life cycle and how it's going to change things. We're in, like, "day one" of that revolution. But it's happening so fast. It shouldn't be long before you could sit in any office building, order a book on-line and then pick it up in the lobby of that building because every basement of every building will have a laser printing system.

That kind of stuff gets me pumped. Over the next five years, business-to-business is just going to continue to explode on-line. It blows me away. That is phenomenal. If you think about it, that's really the ethic that Michael Dell brought to Dell. And that's why Dell has been so fabulously successful so quickly. So I'm a huge dot-com proponent. I drank the Kool Aid. I don't think we've all figured out how best to use it.

A company like Procter & Gamble, that has a full portfolio of products, may not be able to drive a lot of traffic to a Tide site. That doesn't make a lot of sense. But when people need information or have questions about fabric care or laundering, it could make sense to be involved in that as a Tide marketer. And then the other side of that, on the transaction-based model, I don't know if the Peapods of the world have cracked the code yet, but they will, because the most valuable commodity we have is time. Going to the food store and getting food is a model that's ripe for change because it takes up a lot of time and it's not necessarily fun.

Thomas Jefferson has always been a big influence. That's probably where my fascination with building started.

In terms of CNBC.com, CNBC the brand -- our cable offering -- is probably more focused on the individual investor. CNBC.com, because of the utility of the Web, presents not only the opportunity to serve the individual investor, but also move into the realm of personal finance. That's because CNBC.com can customize programming and tools around very specific audiences. With TV -- even with cable which is vertical by nature -- you're appealing to a audience that has more similarities.

Is it safe to assume that CNBC skews toward a male audience?

Right now we do, although we see the other demographics, female notably as well as certain age groups as captured in a terrific Fortune Magazine cover story a few weeks ago, called "Trader Nation." We have several different sources that show us numbers as high as 85 million Americans are participating in the equity markets today. In a country of 275 million, that's an impressive statistic. We see individual investors in all walks of life. We see students in college towns like Madison, Wisconsin, and we see retirees in Santa Fe. But they're both extremely active and involved individual investors.

Do you have any plans to appeal to specific demographic groups, like women, for example?

Women are a terrific opportunity for marketers because they are half of the population. We're not the first financial institution or company to recognize that. Women in American society are extremely involved in financial decision-making. So there is a need to serve their needs. Women are also more prone behaviorally to seek information and insights. They are a little more thougthful, a little less emotional, in terms of personal finance decisions.

So it's a natural that we would do some things for women with the CNBC brand. Currently on the TV product, our cable delivery, we do things for both men and women in terms of education. We de-code and de-mystify the markets for people. If we're using a word like "derivative" or "fair value," we either define it right there or we'll tell people to go to our glossary on CNBC.com. On Thanksgiving Day, we ran an hour-long show on how to use CNBC. We took viewers through in a tutorial fashion -- all the way from how to read the live ticker to how to understand when people are talking about equities, bonds, trades, asset allocation. There are some fairly sophisticated financial concepts we try to break down and de-code and de-mystify.

CNBC.com already -- because of the utility of the Web -- can create more specific tools and a suite of services around a whole portfolio of audiences. And they're looking at that aggressively.

You have a program on CNBC.com called the Student Stock Tournament. What's the thinking behind that?

The Student Stock Tournament started a couple of years ago. CNBC is a growing organization that has a very entrepreneurial ethic. When good ideas come up anywhere in the company we capitalize on them. There was someone in the communications group, the PR group, who had the idea to do The Student Stock Tournament. They had some interest with an outfit to provide this service. It really is a grassroots marketing effort.

Growing up in Atlanta, if you didn't dream of being a builder or a developer, you really weren't growing up in that town.

It was amazing that the demand and interest level was so high -- we've got ten thousand high schools participating now -- that we could generate a sponsorship for it, by the Lincoln Financial Group. It's something we're now bringing a different marketing sophistication to. Not that we're going to abdicate high school going forward, we're thinking in terms of maybe creating a fantasy league for colleges and business schools and maybe a master's league for professionals. We could have a little fun with it, where conceptually we could provide phantom money to create a portfolio. If, over a fixed period of time players outperform a designated group of pros, we may award a couple of lucky winners the actual appreciation of their portfolios.

We're looking at that because we believe that everyone can participate if everyone is armed with the right insight, information and know-how. Individual investing can not only be fun, it can be personally rewarding. Individual investing certainly still has risk. What can go up certainly can go down. But if you really adhere to the first point that we're educating and providing insights and information, it's something we believe that school age kids certainly could learn quite a bit about. It's important for them to know about investing.

You're building a galaxy of stars, like Maria Bartiromo and others. Is that a key part of your marketing strategy?

I think you have to look at ways that brands differentiate themselves. We're delivering news and information. We also deliver insights and analysis. And most of the insights and analysis come from reporters, individuals. They are a critical part of our total presentation of content and to de-mystify what's going on. Maria has been very effective in making sense of what's going on at the exchange. That's been one of her key areas. But Joe Kernen and David Faber, Mark Haines on Squawk Box in the morning, really break down and give people a head's up of what's going on that day.

So there really are two levels to our programming that are important. First there's the access and the fact that it's real time. The second bucket is that we deliver our services in a de-coded and de-mystified way. But because we are in the media business and are a network company, we also deliver it in an entertaining way. We take our subject matter very seriously, but we don't take ourselves too seriously. And I think that comes through with Ron Insana, Sue Herera, Maria Bartiromo, Joe Kernen, Mark Haines, David Faber -- the whole ensemble cast we have of reporters. Our viewers are responding to it -- not only our users but also just popular culture. You see our talent in all kinds of media today, in terms of articles and stories.

What's the end game?

We want to get people to think differently about CNBC. If you think about it, we have a user base, people actually useCNBC. We affect consumer behavior almost instantly. If I were to tell you that today at 3:04 p.m. Bob Wright's coming on to say that NBC is buying Disney, a lot of people are going to do something with that information. I'm making that up, by the way!

I'm a work-hard, play-hard guy. But I really try to turn it off when I leave the office.

We tried to think of other broadcast information that affects consumer behavior as quickly. We came up with two, but they don't do it as well. One is the emergency broadcast system. If the emergency broadcast system says that Hurricane Irene is coming to your town today with 300 mile an hour winds, you're going to do something. The other is just the weather channel or the meteorologist reports every day. If it says it's going to snow today you and I are probably going to dress a little differently.

This is stuff that is real-time, insightful, meaningful, useful information that people act on. It's delivered on a television platform, but people are watching and using us in the office. We're "okay" TV viewing in the office. You go on the trading floors and we're on all the trading floors. At J. Walter Thompson, the executive floor, in the fourteen offices including the group I was a part of, every one of them had CNBC on. This is different. In this country alone, we're in the right place at the right time. There are 81 million Americans that are part of the boomers, they're all hitting their peak earning years and retirement's looming. The most affluent society in the world and we have the most Americans investing in the equity market.