Kincaid gets animated

Less than a year after shifting from malt to media, David Kincaid has changed gears yet again by taking on the post of chief marketing officer at animation powerhouse Nelvana.

Less than a year after shifting from malt to media, David Kincaid has changed gears yet again by taking on the post of chief marketing officer at animation powerhouse Nelvana.

It was only last September that Kincaid left his long-time position as marketing SVP at Labatt Breweries of Canada to take over similar duties at burgeoning Toronto-based media company Corus.

Kincaid’s latest move follows Corus’s $629-million acquisition of the Toronto animation and production company last year, which also included children’s book publishers Kids Can Press and Klutz.

Kincaid has been enlisted for his expertise as one of the nation’s top brand portfolio strategists. His job will be to elevate Nelvana from one of the world’s leading producers of animated programming – it currently has 23 series airing worldwide including the Saturday morning blocks on both CBS and PBS in the U.S. – and turn its shows and characters into certifiable brands.

While Nelvana’s programs, such as Franklin, Babar and Rolie Polie Olie, are known the world over, there has been very little in the way of true portfolio management, Kincaid says. To get it going, he has begun to emphasize such brand building basics as market segmentation, the development of brand positioning statements and consistency of message.

Despite the lack of sophisticated branding expertise, the company’s success is undisputed. Over its 30-year history Nelvana has delivered programming to more than 160 countries and maintains a library of over 1,650 cumulative half-hour episodes.

Sales of licensed merchandise have grown 45% over the past two years and now account for roughly 6% of the company’s total revenue.

But Nelvana founders, Michael Hirsh and Patrick Loubert, who have demonstrated an uncanny knack for reading the lay of the land, saw that in order to continue growing the company, they needed look at how they were taking their brands to market. As such, they turned to Corus for its expertise in portfolio management. It was, Kincaid says, a key factor driving the company’s sale.

But the new marketing boss’s job will not be easy. In the ebb and flow of kids marketing, the industry is at a distinctly low point. Nelvana’s top competitors, Disney and Warner Bros., have been struggling and have announced layoffs and store closures.

In the case of Nelvana, the company’s lucrative licensing and publishing businesses has come under fire from analysts following an earnings drop in the third quarter to $600,000, down dramatically from $3 million in the first quarter and $6 million in the second.

Still, Kincaid remains confident that the company has yet to fully explore its potential in creating world-beating brands out of the properties it has developed over the years.

Strategy sat down with Kincaid to discuss his plans for branding both the company’s properties and Nelvana itself.

Q: What new opportunities do you see for Nelvana in terms of marketing potential?

Kincaid: The biggest new opportunity is the fact that we’re going to market it. Nelvana has had a hugely successful 30-year history as a Canadian-based, world-class global animation production and distribution company. That’s why Corus bought it. But where the marketing leverage comes into place is if you start to look at it as an owner and creator of world-class entertainment brands. It leverages the core competency but it takes you into a much bigger arena.

Q: Does that include creating a Nelvana brand that is recognizable on its own, as well as branding all the properties?

Kincaid: There’s a corporate positioning and marketing job to be done. But in many respects I would put that as secondary to where the bigger opportunity lies, which is to transform these properties into consumer entertainment brands.

Q: So let’s use Franklin as an example. What will you do?

Kincaid: Step one, as we begin to market Franklin as a brand, is to ask, ‘What is its positioning in the marketplace? What segment of the market are you targeting with Franklin? What’s the unique selling proposition? What’s the brand character for Franklin?’ And make sure it is reflective of what the needs of the consumer group are, whether it be the children themselves who are watching it or the parents who are in many cases buying it…It’s doing the necessary research to understand what those consumer needs are, how Franklin is currently delivering on them, and where it could be tweaked to deliver even better. Then we take the next character, whether it be a Babar or Little Bear or Elliot the Moose, and do the same thing.

Q: That’s not unlike what you were doing at Labatt.

Kincaid: We’re doing something very similar to what I spent 15 years doing at Labatt, which is developing, targeting and delivering branded propositions to the appropriate consumer.

Q: Is that why you were recruited, because of the similarities?

Kincaid: It probably had something to do with it. You have this portfolio of brands that you optimize. You address different consumer segments with them. So you segment the market, you position the brand, you map them competitively against a positioning statement, ensure through research that it is delivering on the needs of that segment, then develop the appropriate in-market support program for it.

The basics are pretty much the same: Awareness, distinctiveness of its image, consistency of delivering on a well-honed positioning. We’re going to do all those things. We will employ advertising to help build that awareness.

Q: So, what’s first off the mark?

Kincaid: We’re about to launch a new brand called Medabots (an animated Japanese techno series)- it’s funny because I’m now actually hearing people refer to these as brands. (It’s launching here in Canada this fall on FOX Kids and YTV.) We have written a positioning statement, targeted a specific segment of the entertainment market, hired an advertising agency (Odiorne Wilde Narraway and Partners, of San Francisco) to help us interpret that positioning in an awareness building, audience viewing, trial driving mechanism. We’ve got promotions in place with our broadcast partners to drive that viewership and trial. So the tools, I’m finding, are pretty much the same.

Where the real difference is, as you’re delivering these types of brands, you’ve got to be very sensitive to the needs of your licensees, your partners. Because I may go out and do something on Franklin only to find that for the three licensees who have our apparel licenses, I’ve just minimized their abilities somehow. So running great broadcast-driven promotion, if I’d just thought of adding some executional hook to it, I could have helped them sell more t-shirts as well. That’s the fine-tuning.

Q: What are some of the brand opportunities?

Kincaid: When you step back and look at the Nelvana list of properties, there are a number of phenomenal brand opportunities. Franklin and Babar and Little Bear are obvious ones.

But [animated series] Bob and Margaret targets adults. What if we did something with that as a lifestyle brand? There’s a production we do for MTV in the U.S. called Sausage Factory. It’s a very quirky, funky blend of humour and lifestyle. What if it was a brand?

Braceface is a show we’ve launched in the U.S. using Alicia Silverstone as the voice for Braceface. It’s all about this teenage girl going through changes and the social pressures that all teenagers do. She’s got braces and they become the icon for that tough period in life that everyone goes through. Well that could become a brand that comes to stand for a state of mind or a life stage that everyone can identify with.

Now you bring in partners to help you market it and suddenly you’ve grown the thing into what YTV has successfully become which is a children’s authority. TSN is the sports authority.

Blue, Carlsberg, Budweiser are beers. They’re not hugely differentiated in terms of their actual functional product characteristics, but they are massively differentiated in terms of their image. Same thing.

Q: So you’re talking about creating brands similar to what Disney did with, say, Mickey Mouse?

Kincaid: I can buy Mickey Mouse t-shirts, tooth brushes, socks and underwear, travel guides. The brand value that Mickey Mouse has come to stand for is an indication of what we believe we can do here at Nelvana with a great portfolio of properties.

Q: What about creating a Nelvana brand along the lines of what has been done with Disney? Are we going to see a Nelvana theme park down the road?

Kincaid: That’s the beauty. If you change your frame of reference from producing animated shows, suddenly the revenue streams, the profitability – the upside – is magnified a thousand fold. Look at Eddie Bauer. They’ve done a great job. How much money do they make a year in a royalty from the Ford Motor Company for putting their logo on the back of the new Explorer? There is equity.

Q: So we’ll see Nelvana as a lifestyle brand?

Kincaid: To link it back to my expertise in the past, beer is a lifestyle. It’s a badge category; it’s image management. That’s what this is.