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SEPTEMBER 2003
When Joe Perello got the phone call about a job opening as the chief marketing officer for the City of New York, he didn't quite believe it.

Joe Perello, New York City
the Big Apple brand
"I was told that the position would take responsibility for the centralization of all city marketing assets -- including media and promotions," Joe recalls.

"I thought it was pure genius that Mayor Bloomberg and Deputy Mayor Dan Doctoroff came up with the idea -- but I didn't believe it."

That was in January of 2003. By April, Joe had been officially appointed to the position, and by September, he had already swung his first sponsorship deal -- a $166 million package with Snapple, the beverage company.

Comments Joe: "Snapple benefits by having a unique platform from which to communicate with New York City and the rest of the world, as well as a way to grow sales signficantly.

"The City of New York," he continues, "not only receives a significant cash commitment, but also relevant and meaningful exposure outside the city, as well as a way to ease the burden of government by providing a vending solution for school principals, freeing them to focus on education instead of facility maintenance. Both Snapple and the city are improving the quality of life in the city because the sponsorship supports the PSAL and school athletics."

He adds: "Snapple is popular with both children and adults, and has committed to making a 100 percent juice product exclusively for the schools. No one else volunteered to do that."



Selling naming rights to bridges and parks -- that's the easy way out. That's not what we're going to do.

As improbable as this "Big Snapple" partnership may sound at first blush, it actually builds directly on Joe's background and experience, which began with MBNA, the credit card company, where he learned about the emotional allure of sports marketing, as well as the power of direct marketing. "They really started the affinity card business," he says. "They started it, and they perfected it."

Joe spent ten years at MBNA, and his work on the Yankees' Visa Card brought him to the attention of the team's vice president of business development, who recruited Joe in as his successor. "Working for George Steinbrenner was like doing two tours in Vietnam and not getting killed," says Joe. "It was the craziest two-and-a-half years of my life."

That was followed by about a year of helping David Bowie start a subscription-based fan site. Joe had worked on the Yankees' website and came in touch with Bowie's managers. Says Joe: "David Bowie is a great businessman who knows how to make money. He's a great guy -- a family man with a beautiful wife and a great family. He's a New Yorker now, but a lot easier to work for than Steinbrenner!"

At about the same time the bottom fell out of the dot-com market, Joe and his wife were expecting their first child. So Joe took over his wife's company, which was a consulting firm with a direct marketing focus. It was a struggle -- this was the post-9/11 marketplace -- but he managed to land clients such as the Toronto Bluejays, the NFL and the Modell's Sporting Goods retail chain.

Actually, it was Modell's president, Mitchell Modell, who rang him up and first told him about this unbelievable job in City Hall, working for Mayor Bloomberg, and developing New York City's potential as a brand.


verbatim

What makes New York City a brand?

Number one, is it's known virtually around the world, so it holds a place in people's minds. It has brand attributes that other great brands have, and that they use to make money. You can compare the New York City brand to Disney. You can compare it to the National Football League, or to the Olympics, in that sense.

Joe Perello, New York City
Those properties -- those brands -- have certain attributes in common. People are emotionally attached to them. They have a mass appeal that enables them to acquire equity. And they're inspiring. People aspire to be in the Olympics or to go to Disneyland.

People write songs about New York and build brands based on our image. We sell pizzas and cars and clothes -- DKNY, the Chrysler New Yorker and Buick Park Avenue. For 400 years, the world has interacted with New York City.

Whether it's through a television show, a movie, a poem, a song, a book, the UN, a newscast, a newspaper or a stock purchase -- the world has a relationship with New York City and that enables us to build equity in this brand. But the main thing is that we're inspiring. Inspiring events take place here. They may be good or bad, but they're inspiring.

So, how do you generate revenue out of all of that inspiration?

By centralizing and protecting intellectual properties and assets. The NFL, for example, has a series of marks and logos that they have registered. They also have physical assets that they can protect and provide. Television broadcasts makes $2.2 billion a year for the NFL.

That's what has been missing in New York City -- centralization, a strategy, and a set of intellectual properties that can be protected. Now, can we register the words "New York City"? No. We cannot and will not do that because it's impossible. Can we create our own, New York City series of marks and logos that are centered around the city? Yes, absolutely.

We have a series of marks and logos that are already registered -- FDNY, and NYPD are enormously valuable marks and logos that have enormous amount of equity built into them. They have been licensed and will continue to be licensed on appropriate items and products. But licensing is only one side of what we're doing.

On the other side are corporate partnerships, which are much more complicated, but they can provide an enormous amount of revenue for the City of New York. What we have done is identify what the marketing assets are -- the physical marketing assets -- from outdoor media to events, television stations and websites. We've identified all of these assets, centralized them, and then packaged them in a way that an American Express or a Citibank or a Snapple would care about them.
I Love NY
In the past, most cities thought public/private partnerships were generally philanthropy -- but the good ones are not. I'm not saying that philanthropy shouldn't exist in municipalities; they should. But we're not in the philanthropy business, we're not good at it and that's not what we do. What this department is set up to do is to provide marketing solutions using the city's intellectual and physical marketing assets.

How do you do that?

A corporate partnership with the City of New York will live on several different levels. The first level is primarily an association with our brand or brands. That means an official association with, let's say, fire, police, landmarks or the department of education -- whichever product category you happen to be doing business in. Some or all of those may apply to your brand.

Number two is a community initiative. In most sponsorships, a community service element is present. It's appropriate that our partnerships serve to better operations in the city by funding programs that are worthy and popular but otherwise might not get done because of financial or other hurdles. For example, we have a graffiti truck program -- 12 trucks ride around the city and they erase, or paint over, graffiti. It's a great program and everybody loves it. Who wouldn't love that?

Well, that program costs about $1 million a year. Do we have to have it? No. Is it great to have? Absolutely. Someone should fund that and someone's going to care about associating with that -- whether it's a paint company, a brand like Lysol or Servicemaster. There's a company out there that would benefit from an association with that initiative.

Then there's a media element, as well?

Mayor Michael Bloomberg and Joe Perello, New York City
Yes. The third level that companies will associate with us is in communications. How can we help the sponsor talk about what it does through our own marketing assets? For example, we own and control an enormous amount of outdoor media. However, we've never kept any portion for ourselves. We've basically franchised it all out and let someone else worry about it.

In effect, we're like a television network that can't talk about its own shows! But we've got outdoor media from bus stop shelters to street banners to ferry boats to ferry terminals -- we have a lot of outdoor media and this is without installing one new sign. I'm not talking about putting signs up everywhere, but just using what we have right now.

The city owns four or five television stations. We can't run 30-second spots on there but we can certainly provide our sponsors with credit ala PBS and create really compelling content about the sponsor and the city and how they work together. That's what that communication piece is about. It's about enabling the sponsor to talk about its association with the brand. It's community initiatives inside New York City. So, licensing fees get us so far, but delivering value gets us farther. Delivering a communication vehicle enables the city to make more money without having to spend money.

And all of that would feed right into the marketing side.

Absolutely. The fourth level is cooperative marketing. The same way that Mastercard promotes baseball, Coors promotes football, and BMW launches James Bond films -- our partners are going to promote New York City, outside of New York City. The purpose is to do two things -- increase tourism and increase jobs, depending on what product category or marketing universe that company works in.

Some people will be promoting us regionally, outside the city, in a 90-mile circle, depending if they're a regional company. Some companies will be promoting us on the Eastern seaboard. Some will be promoting us across the whole country and some will be promoting us around the world. It depends on where they market.

The way they'll do that is the way that any other corporation that seeks an association with an emotional property does it. Someone may make a beautiful television commercial about New York City the way that Mastercard made a beautiful television commercial about baseball. That doesn't cost the film company any money -- in fact, they make money from that. That's basically our model. It's nothing new. Someone invented it already and we're applying it to a municipality. That's what's new.

FDNY hatWhen you were with the Yankees, you ended tobacco sponsorships. Are there any sponsors that you would view as being off limits for New York City?

Well, certainly tobacco. That's a no-brainer. Regardless of the mayor's stance on smoking, a sponsorship with a tobacco company is off limits right now. But, yeah, I guess I have a history of ending relationships with tobacco companies! I also quit smoking, so that makes sense too.

Are there others that you think are particularly incompatible?

I'm not sure how we're going to handle alcoholic beverages. I'll admit that I don't know the answer to that one.

On the flip side then, which brands or types of brands, do you think would make the best partners for New York?

That's a good question. We care about the brands that we associate with and this is going to be a real test for city government. My job is to choose which brands we want to associate with. The New York City brand has a lot of different characteristics and we need to associate with brands that elevate New York City, and that's a very, very, very subjective thing.

But there is some science to it. There are some great firms out there that really understand how to measure brands and how to measure brand attributes. For example, we have a partnership with the Brand Asset Evaluator, which measures brand equities and attributes. They've measured our brand and they can match us up with other brands, in terms of where we can help other brands and where other brands can help us. That's important. It's not going to be easy.

Joe Perello, New York City
Given that Mayor Bloomberg is a businessman and a bottom-line kind of guy, how are you going to demonstrate the ultimate return on investment of your marketing strategy to him?

Easy. That's so easy. Number one is -- cash. Number two is money, or marketing value, spent on New York City outside of New York City. And then, over the course of about two years, an increase in tourism and in jobs. That's harder to document as resulting from our marketing efforts. But it's easy to figure out how much cash is worth.

How does it compare, working for Mike Bloomberg versus George Steinbrenner?

Well, first, there is no comparison because my boss Dan Doctoroff is -- and I mean this even though it's hard to say it because he's my boss -- by far the best boss I've ever had. He totally and completely understands how to manage me and motivate me. And of the Mayor, I would say the same.

First of all, they are two really visionary guys who care about the right things and about doing the right things. That's what I care about, too. In New York City, like in other cities, you're never really going to please everybody -- starting with the press. You're never going to please everyone in the media and you've got to know that going into this. I learned that working for George Steinbrenner.

Basically, it didn't matter what I did, George Steinbrenner was going to kick my ass. If I walked into his office with a briefcase full of a million dollars, he would have yelled at me that they weren't $100-dollar bills, that they were $20s. So, first you have to know that it doesn't matter what you do, he's going to kick your ass. Once you realize that there's only one thing to do -- whatever's right -- it's easy to do your job because you're just going to do what's right.

And I think that's how the Mayor runs the city. He does what is right because someone's going to kick his ass either way. That's how I view my position here. I've just got to do what's right.

How important do you think your initiatives are to Mayor Bloomberg?

empire state building
You know, I don't know if I can answer that question. I think they're very important to him, or else he wouldn't have sought us out and created the position and done all of this. I mean, the city needs revenue, so that's important. But it really goes beyond that.

The real way we impact things is by increasing tourism and increasing jobs. That's really how we make a sizeable impact on life in the city. We've got to be careful that we do it in a tasteful and smart and intuitive way. Selling naming rights to bridges and parks -- that's the easy way out. That's not what we're going to do.

We care about win-win not just because it's the right thing to do, but also because we know it's good business and it's going to benefit New York City in the long run. The Mayor is committed to that, Dan Doctoroff is committed to that, and I'm committed to that. That means helping private companies do better, helping them grow their businesses because we know it helps us. It's a simple equation.

How big an idea is it to develop New York City as a brand?

Easiest question I ever had! First, you have to imagine in your mind how big New York City is -- people-wise, space-wise, street-wise, and opportunity-wise. There is unquestionably something here for everyone. New York City lives on virtually every level of thinking. It lives on every demographic level. It lives on every socioeconomic level. It lives on every psychographic level.

It lives everywhere and it is relevant to almost everyone in some way or another. So, it is relevant for every single product category. Do I know what the answers are for Dunkin' Donuts or for Tylenol? No. But I know the answers are here. I know we have answers and I know we have solutions. If I know anything, I know that. Which is why I'm the luckiest guy in the world.



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