JCPenney to review US $450m Media Business
What: American retailer group JCPenney will launch a review of it almost US $450m media business after a decade.
Why it matters: OMD has handled the account since 2000.The brand's media spending was close to US$430 million last year, down from more than US$500 million in 2012.
Retailer JCPenney is said to be reviewing its US $450m media agency business for the first time in almost ten years. Longtime incumbent agency OMD is expected to defend in the retailer's review of its media account, according to sources. Creative responsibilities will remain at Doner in Southfield, Mich. Doner has worked on the brand since last fall.
Omnicom’s group OMD has been handling the account since 2000, despite the retailer’s efforts to revamp the brand, particularly when targeting the Hispanic demographic including changing its’ lead creative agencies four times in 14 years, as well as several CMO and CEO changes.
In August 2013, JCPenney appointed former Kraft Foods marketing boss Debra Berman as its senior vice president of marketing.Berman brought in a completely new agency team including Doner, Victors & Spoils and EVB. Earlier this month, Ms. Berman suggested that the company needs to appeal customers and ensure they keep coming back. According to Berman, the target customer is multi-cultural with "two little kids, too little time and too little money.”
Although the review is in the early stages, Berman will be in charge of overseeing and ultimately being part of the key decision-maker group.
JCPenney reported net sales of US $2.8bn in its most recent quarter, compared to US $2.66bn during the same time last year. Last year, the retailer spent more than US $435 million in media and about US $170 million in the first half of 2013, according to Nielsen. Those figures don't include online spending, however, which rose 17% to US $249m.
Shifting to Multicultural customer
The change came after a pitch and as the retailer is getting ready for its vital holiday shopping season.This is part , too, of a whole restructuring of JCPenney's marketing organization and a shift to a more multicultural clientele.
According to Cesar Sroka, Group Account Director, Omnicom Media Group, Hipanic women or as he called them "The Latina Muse", for instance, have become a priority perspective for JC Penney. Ana Lucia Soto, Media Manager, JC Penney and Lyris Calisto Leos, Brand Marketing Strategy Director, JC Penney both agreed on this at Portada's recent 8th Annual Conference: "The Latina Muse is image driven and confident," agreed Soto and Leos.These characteristics play into JC Penney's fit strategy and messaging towards Hispanic women.