Brownstone & Partner White Paper

Marketing 2.0

That awkward moment when you realize an energy drink has a better space program than

your nation.

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Brownstone & Partner

Brownstone & Partner, LLC Burggasse 24/18 1070 Vienna Austria www.brownstone.at Phone: +431-524-1412 Email: office@brownstone.at Copyright © 2012 Brownstone & Partner, LLC Readers are free to distribute this report within their own organizations, provided the Brownstone & Partner header is present on every page.

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TABLE OF CONTENTS

Executive Summary 4

Introduction 6

Let People Relate 7

Make Sure People Are Watching 8

Fit The Campaign To Your Tagline 9

Corporate Social Responsibility 10

Be Committed To Your Brand 11

Conclusion 12

Bibliography 14

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Executive Summary With his jump from space in October of this past year, Felix Baumgartner did not only break the sound barrier and other numerous records. He – or rather Red Bull – also broke the rules of the marketing world that were thought to be set in stone. The marketing stunt that Red Bull pulled off with its Stratos event dumbfounded people the world over. What does one man’s jump from the edge of space have to do with an energy drink? The short and far too quick answer would be “absolutely nothing.” What this white paper will do, though, is show how indeed the two things can now be thought of as practically interchangeable. What did the millions of viewers see when they watched the footage of the jump? Red Bull. It is as impossible to mention the event without mentioning Red Bull, as it is to get a picture of it without the Red Bull logo. Brownstone & Partner is Red Bull’s in-house marketing agency, and the company that came up with this advertising campaign. They broke far more than the barrier of sound: they broke the barriers of the current world of marketing, opened up a whole new domain, and sent the unreachable horizon flying. Although the success of the campaign has yet to be truly measured in numbers (Red Bull is currently privately owned and hence isn’t on the stock market1), it is clear that their fourth quarter profits will have had a record high. Brownstone & Partner delivered something new, and the second Felix Baumgartner landed on the ground with his two feet, it was clear that this type of advertising was not going to be a one-hit wonder. This was only going to be the first of many such campaigns that the world was going to see. Agencies of all calibers have put pen to paper and begun brainstorming on how to come up with something that might just come close. It will become imperative for agencies to do so, as once a marketing barrier has been broken, there’s no turning back. Marketing 2.0 is no longer a compete – it has become a qualifier. This white paper brings the backstage of the works closer to the reader. The reader should understand why Red Bull and its marketing are indivisible, and why in fact marketing campaigns such as the ones that Red Bull uses are slowly but surely becoming quintessential for all companies to implement. This white paper explains the marketing world’s transition from a compete to a qualifier. To explain, a qualifier is something a company needs for it to be in business, as opposed to a compete, which is something that pulls it ahead of its competitors. As an example, twenty years ago a company logo was a qualifier, and its website a compete. Today, a company website is considered a qualifier, and its advertising campaigns competes. And it’s the last leg: turning over-the-

1 Hammond, Ed, Red Bull: Where Marketing Goes Into Overdrive, Financial Times Online, 9/27/2011

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top marketing campaigns from competes into qualifiers that Red Bull has taken into its own hands. What’s challenging is picking out the most essential parts of the campaign. This is what this white paper does. It takes the campaign apart completely and then summarizes it in five points – a clearly laid-out recipe for success. 1. Let People Relate 2. Make Sure People Are Watching 3. Fit The Campaign To Your Tagline 4. Corporate Social Responsibility 5. Be Committed To Your Brand

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Introduction Brownstone & Partner has worked with Red Bull since the day Dietrich Mateschitz went searching for an agency to design the logo of his newly established company in 1987.2 Working with Mateschitz and his team to create the Red Bull brand has been an exciting experience every step of the way. The collaboration of the teams works as excellently as it does because of the shared understanding of what it is that everyone is trying to achieve. The goal was to create something new, exciting, and extravagant. Something that breathes, evolves, and lives. And this was achieved, thanks to the tireless efforts of both teams, looking to reach and surpass horizons wherever they were spotted.

The work that goes into coming up with company colors, logos, fonts, and taglines is something that practically every company goes through. Market research and targeting certain market groups is something that is already one level higher. What Brownstone & Partner’s cooperation with Red Bull has achieved, though, is the complete creation of a brand. Red Bull is not like any other energy drink or even any other brand. It is a brand that rings bells and sparks emotions. A brand that transcends into different parts of our everyday lives and greets its consumers at all hours of the day. A brand that is alive and tangible. If your company doesn’t adapt the recipe for success laid out in this white paper, chances are it will not keep up with the new era of marketing. Furthermore, it will not be around too much longer to list its coulda, woulda, shouldas. The time is now. And the recipe for success is in your hands.

2 Red Bull Website, Company

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Let People Relate All marketing campaigns and viewer records aside, the world needs to pause for a minute and realize what happened on October 14th 2012. A man, 43 year-old Austrian Felix Baumgartner, stepped out of a capsule at the edge of space – at 24.3 miles – and jumped down to earth.3 His ascent broke the record of highest manned balloon flight, and his descent the highest altitude jumped. During his jump, Baumgartner was the first human to break the sound barrier without any form of engine power.4 Shortly after the Stratos took place, some communities across the world could not resist the urge but to let their cynical side have a go at mocking it. Conan O’Brien offered the platform, and Slim Jim their logo, and the World’s Shortest Freefall took place.5 Clearly, neither of the two companies took themselves very seriously. In fact, their mockery video didn’t even make it to one-tenth as many views as the Stratos one did.6 Why do we watch the Olympics? Why do we race? Why do we compete on television? Why do we bet? All of these questions have one joint answer: Because we want to win. We want to be number one. It’s Darwinism and it’s in each and every one of us. We watch other people race because we can relate. This is the feeling that the Stratos evoked in us. We wanted Baumgartner to be the first. To be the first to dare to go up that high, and to dare to jump down. We wanted him to break the sound barrier, and we wanted him to land safely. We were rooting for him. In fact, we were on his team. The records broken by Baumgartner in October are inconceivable to most of us. What does breaking the sound barrier even mean? How fast is that? It’s 760 miles per hour. That’s faster than a commercial plane. It’s a speed that – unless you’re a jet pilot in the Air Force – you will never experience, let alone experience in free fall. The past events in our lives together with the knowledge that we have cannot even get us close to understanding what Baumgartner felt. And yet, we’re right there with him. Our adrenaline is high, and our mirror neurons are firing away. We all strive to be special, to achieve something extraordinary, and to be remembered for something. Most of us will never succeed. And so we need our hero. We need someone who goes and does it for us and brings home the medals. We need to cheer someone on. We need to relate to the person, the goal, and the success. Let your consumers relate, and they’ll be on your side.

3 Red Bull Stratos Website, World Record Jump

4 Amos, Jonathan, Skydiver Felix Baumgartner Breaks Sound Barrier, BBC News Online, 10/14/2012

5 Stampler, Laura, Slim Jim And Conan O'Brien Present World's Shortest Free Fall, Business Insider Online, 10/17/2012

6 Team Coco, CONAN Exclusive: World's Shortest Freefall! - CONAN on TBS, YouTube, 10/16/2012

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Make Sure People Are Watching What good is a brilliant advertisement if no one ever sees it? No good at all. This is why any marketing campaign’s goal is for it to be seen by as many people as possible. We have commercials on the radio, television, in the form of billboards and magazine inserts. We have banners on the internet, and of course we have word of mouth. These and many more ways are how agencies try to convey their message to the public. The Stratos would have had no worth at all had it not been seen by as many people as it was. In the end, it was not about a man jumping from the edge of space. It was not about breaking the sound barrier. It was a marketing stunt. The most impressive records that were broken have to do with the number of viewers that watched it. With over eight million concurrent viewers watching the jump live on YouTube alone,7 and millions more watching it on over 40 television stations and 130 digital outlets,8 this ad broke all viewer records it could. In Austria, home of Red Bull and Felix Baumgartner, close to 40% of the population watched the event live.9 Translated, that’s a higher percentage than of the population that voted in this past presidential election in the United States. An estimated 65.6 million Dollars were spent by Red Bull on the Stratos.10 Can’t imagine this sum paying off? Think again. If every live viewer were to buy one can of Red Bull they would already surpass the break-even point. It’s clear to everyone, though, that this figure was and will continue to be more than surpassed. The Stratos is inseparable from the brand, which is what makes it so valuable to Red Bull. Ben Sturner, founder and CEO of a NY-based marketing agency observed that "You can't get a photo of Felix without the Red Bull logo and you can't talk about him without talking about Red Bull Stratos.”11 Every news report, every image or mention of the jump: Red Bull’s name was right there with it. If you’re going to spend any money on marketing at all, you have to make sure people see it. Make sure to reach as many viewers as you can. Only this will result in a successful campaign.

7 YouTube, Mission complete: Red Bull Stratos lands safely back on Earth, Broadcasting Ourselves – The Official

YouTube Blog, 10/14/2012 8 Chun, Janean, Red Bull Stratos May Change Future Of Marketing, Huffington Post Online, 10/15/2012

9 Neumann, Fritz, Ein Rekord-Fall für die PR-Branche (A Record Fall for the PR Field), Der Standard Online, 10/15/2012

10 Neumann, Fritz, Ein Rekord-Fall für die PR-Branche (A Record Fall for the PR Field), Der Standard Online, 10/15/2012

11 Chun, Janean, Red Bull Stratos May Change Future Of Marketing, Huffington Post Online, 10/15/2012

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Fit the Campaign To Your Tagline A man falling from space at 833 miles per hour12 and the tagline to the brand is Red Bull gives you wings. It can’t get any more perfect than that. The Stratos enforces the brand’s tagline by telling the viewer that the jump was possible thanks to the wings that were given to Felix Baumgartner by the drink. The Stratos would have probably had a lot less of an effect had the tagline been Got Milk? or the like. Viewers need to be able to associate the image they see with the words that come to their mind, and vice versa. From now on, when someone here’s Red Bull’s tagline, they will think of Baumgartner’s jump, and most importantly his landing safely on the ground. With all the brands, their logos and taglines swirling around us all the time, it’s crucial to come up with a both memorable and identifiable tagline.13 Clearly, when Red Bull first created their slogan, they didn’t even dream of the Stratos. That’s not the order of events, of course not. The tagline comes from founder Dietrich Mateschitz’s love for airplanes and flying.14 When the Red Bull team sat down to discuss their newest marketing campaign, though, they made it a priority to build it around their tagline. It’s undisputable that Red Bull could have created a million and one more mind-blowing ideas, but what they needed was the perfect fit. Red Bull is an energy drink that can keep its consumers active even when working on close to zero hours of sleep. It truly does wonders, just like Stratos was a wonder. It was an achievement like no other. The way it was executed, broadcasted, and the success it turned out to be was exactly what the brand stands for. When creating a campaign, it needs to go hand in hand with your brand’s tagline. Make sure your tagline can be differentiated from all the others out there. The campaign you create needs to be built around and traceable back to your tagline. When someone hears your brand’s words, you want inductive reasoning to bring them to you as consumers.

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Discovery News, Red Bull Stratos Mission Success!, Red Bull Stratos Skydive Live Feed, Discovery News Online, 10/14/2012 13

Gatbonton, Aurora, 77 Catchy and Creative Slogans, Hongkiat Online, 3/4/2011 14

Paur, Jason, Peek Inside Red Bull’s Toy Box, Wired Online, 1/28/2011

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Show Corporate Social Responsibility “That awkward moment when you realize an energy drink has a better space program than your nation,” was a quote that spread around the internet like wildfire in the days following the Stratos. The thought was very to the point. Does Red Bull in fact have a better space program than NASA? One thing is for sure: They have more money that they can spend on the research that goes into projects of that kind. In 2010, President Obama called for an end to NASA’s moon program.15 A big reason was of course cutting government spending on research that was not essential. So if someone does have enough money and willingness to put into a project such as the Stratos, why shouldn’t they? A big part of corporate social responsibility is making a marketing strategy out of it. Donating partial profits, whole shoes, or food are only a few ways that companies go about doing good. The companies look good in the eyes of the consumer, making them more likeable, and in turn the preferred brand. This is how the phrase “doing well by doing good” came into being. The groundwork for the Stratos project was already laid in 2005 – seven years before the final jump took place.16 Clearly, there was not only the marketing aspect to work on. What Red Bull was working on was scientific research, calculations, experiments, and test-runs. They invested time and money into a project, which today the NASA and many other scientists are very interested in. 17 The technology of the suit that Baumgartner wore during his jump is phenomenal, just as that of the parachute he used. Yes, the suit and the parachute had the Red Bull logo on it. As did the capsule Baumgartner ascended in, and everything else that Red Bull could put their logo on. This does not diminish the scientific advancements that were made in the process of the project, though. When creating a campaign, come up with ways to merge it with corporate social responsibility. Companies should be socially aware enough that they make sure to be socially responsible. When spending as much money as they do on marketing campaigns, it doesn’t hurt to also benefit society in the process – in fact, it helps.

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Chang, Kenneth, Obama Calls for an End to NASA’s Moon Program, New York Times Online, 2/1/2010 16

Red Bull Stratos Website, Mission History 17

Amos, Jonathan, Skydiver Felix Baumgartner Breaks Sound Barrier, BBC News Online, 10/14/2012

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Be Committed To Your Brand To not only be successful but more importantly to remain successful, companies must invest in marketing. What is marketing? Investing in themselves. It’s betting on themselves and their brand that putting more money into the business will turn into bigger profits. That companies have to invest some money into marketing is obvious. No marketing would mean no consumers and in turn no profits. Some go even further when explaining the quintessence of marketing. Peter Drucker, a leading expert on management theory, said that marketing “encompasses the entire business. It is the whole business seen from the point of view of its final result, that is from the customer’s point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise.”18 The answer to the question of how much companies should be spending on marketing varies, but usually it doesn’t go over 10% of revenues. In fact, often one reads that just 1% or 5% of revenues is good money spent on securing steady growth.19 Red Bull goes a lot further. Its spending on marketing is estimated to be at 30% to 40% of its revenue.20 Why does Red Bull spend this much money? For one, they want to dominate the market and the best way to this is by knowing your consumer inside and out and by reaching out to them as often as possible and getting your message across. What is more important, though, is the belief in one’s own brand. If a company doesn’t think it’s going anywhere, it won’t bother putting a lot of money into marketing. That is relatively self-explanatory. If it feels there is nothing to gain, then why risk anything at all? Red Bull is on the opposite side of this spectrum in terms of its mentality. It feels it has everything to gain, and it’s willing to put down huge sums of money to win it all. For a consumer to have loyalty and trust in a brand, must the brand not show the same sense of loyalty and trust in itself, as well? Red Bull is committed to being the number one brand on the market, and they believe that they can do it. They are willing to put whatever it takes and more into achieving this goal. Be committed to your brand. Make sure you invest a substantial amount of your revenues into marketing. Both the sign of assurance and the results that the invested money brings will pay off.

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Archer, James, Why do successful companies keep investing in ongoing marketing?, Forty Agency Website, 10/5/2012 19

Visual Scope Studios, Marketing 102, Visual Scope Website, last visited: 12/1/2012 20

Kemp, Nicole, Six Marketing Lessons From Red Bull Stratos, Marketing Magazine Online, 10/19/2012

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Conclusion Red Bull’s Stratos campaign undoubtedly broke the barrier of common marketing. It opened the door to an entire new domain and a new horizon to be reached. It is challenging to identify what the tools that they used are, and what their recipe to success was. Red Bull followed five golden rules, which are the keys to success in this new world of marketing 2.0. The Stratos was an exciting and actually nerve-wrecking event. Will he make it? What records will be broken? How fast will he fall? It’s a natural human desire to want to succeed. Reality is, only the fewest of us will ever fully do. We need heroes to do things that we can’t. We need people who can be the fastest, the first, and the best. Red Bull offered a man who did something that seems superhuman. And although almost none of the viewers knew Felix Baumgartner personally, on October 14th, everyone watching was on his team, cheering for his success. Have a campaign people can relate to. The key to any great marketing strategy is making sure enough people see it. An empty gallery opening, book reading, or film screening are not the key to spreading the word about your brand. There were 8 million viewers watching the Stratos jump live on YouTube alone, and many millions more watching via television or other digital outlets. People need to see your campaign. Your consumers need to be reached. Build your campaign around your tagline. The most perfect fit in marketing is when a campaign goes hand in hand with the brand’s tagline. Like this, the campaign and the tagline can be used interchangeably, thereby reaching more platforms, ears, and in turn consumers. Have your campaign make sense for what your brand stands for and what you want to be associated with. Choose your tagline wisely, and then ensure its implementation wherever possible. Do well by doing good. Corporate social responsibility is not only a marketing stunt. It is also an absolutely valid way of benefiting society. As a socially responsible corporation, you should spread awareness that your brand is benefiting the world somehow. Make yourself likeable – consumers will prefer you over another company that is perhaps doing less for society. If you expect brand loyalty from your consumers, be brand loyal yourself. Be committed to your brand and show it by investing into marketing. Always make sure to take a substantial sum of your revenues and put it back into your company. You need to show that you are committed and going above and beyond, and never settling for what you have. Do what you can to stay on top of marketing your brand and stay ahead of the game.

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Red Bull’s marketing stunt Stratos will be remembered for many years to come, and the project was only the start to a great new world of marketing. Their in-house marketing agency, Brownstone & Partner, ensured the success of this project. The minute Baumgartner landed back on earth, agencies around the world started brainstorming about what they could do to even come close to the project. If they use the five key points that were mentioned, they will be sure to achieve it.

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Bibliography Amos, Jonathan, Skydiver Felix Baumgartner Breaks Sound Barrier, BBC News Online, Oct. 14, 2012, www.bbc.co.uk/news/science-environment-19943590 Archer, James, Why do successful companies keep investing in ongoing marketing?, Forty Agency Website, Oct. 5, 2012, www.fortyagency.com/insights/why-do-successful-companies-keep-investing-in-marketing Chang, Kenneth, Obama Calls for an End to NASA’s Moon Program, New York Times Online, Feb. 1, 2010, www.nytimes.com/2010/02/02/science/02nasa.html Chun, Janean, Red Bull Stratos May Change Future Of Marketing, Huffington Post Online, Oct. 15, 2012, www.huffingtonpost.com/2012/10/15/red-bull-stratos-marketing_n_1966852.html Discovery News, Red Bull Stratos Mission Success!, Red Bull Stratos Skydive Live Feed, Discovery News Online, Oct. 14, 2012, news.discovery.com/space/red-bull-stratos-skydive-live-feed-121008.html Gatbonton, Aurora, 77 Catchy and Creative Slogans, Hongkiat Online, Mar. 4, 2011, www.hongkiat.com/blog/77-catchy-and-creative-slogans Hammond, Ed, Red Bull: Where Marketing Goes Into Overdrive, Financial Times Online, Sept. 27, 2011, www.ft.com/cms/s/0/8733b030-de30-11e0-9fb7-00144feabdc0.html#axzz2E9k45z5b Kemp, Nicole, Six Marketing Lessons From Red Bull Stratos, Marketing Magazine Online, Oct. 19, 2012, www.marketingmagazine.co.uk/News/MostRead/1155718/Six-marketing-lessons-Red-Bull-Stratos Neumann, Fritz, Ein Rekord-Fall für die PR-Branche (A Record Fall for the PR Field), Der Standard Online, Oct. 15, 2012, http://derstandard.at/1350258405423/Ein-Rekord-Fall-fuer-die-PR-Branche Paur, Jason, Peek Inside Red Bull’s Toy Box, Wired Online, Jan. 28, 2011, www.wired.com/autopia/2011/01/peek-inside-red-bulls-toybox

Red Bull Website www.redbull.com

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Red Bull Stratos Website www.redbullstratos.com Stampler, Laura, Slim Jim And Conan O'Brien Present World's Shortest Free Fall, Business Insider Online, Oct. 17, 2012, www.businessinsider.com/slim-jim-and-conan-worlds-shortest-free-fall-2012-10 Team Coco, CONAN Exclusive: World's Shortest Freefall! - CONAN on TBS, YouTube, Oct. 16, 2012, www.youtube.com/watch?feature=player_embedded&v=qBW59yz-_ZM Visual Scope Studios, Marketing 102, Visual Scope Website, last visited: Dec 1, 2012, www.visualscope.com/marketing102.html YouTube, Mission complete: Red Bull Stratos lands safely back on Earth, Broadcasting Ourselves – The Official YouTube Blog, Oct. 14, 2012, http://youtube-global.blogspot.ca/2012/10/mission-complete-red-bull-stratos-lands.html