The Australian industry lauds him as the ‘Father of Direct Marketing’, so it stands to reason the first question to ask Ian Kennedy is whether he’s worthy of such praise. Most people would be politely modest, even self effacing in their response. The chairman of Wunderman is refreshingly frank.
“I feel sorry for the people who probably did as much for the industry as I did, but didn’t talk about it,” he says.
“From the early 1970s through to the mid-80s, if you were interested in direct marketing you would, in Australia, stumble across my name. And that was my aim, that people would eventually come to me as the authority in direct marketing.” Leaning across the table he adds, grinning: “And it worked!”
The Father of DM is fitting honour for Kennedy, if his extensive job title is anything to go by. Alongside chairman of Wunderman, he is currently director of direct marketing at George Patterson Y&R, chairman of the advisory board at independent call centre Custcomcall, and a recipient of the Medal of the Order of Australia for his work with The Starlight Foundation and the 2000 Sydney Olympics ticket marketing campaign.
Kennedy has been in the marketing game for most of his life, starting in 1969 when he moved to New York with Australian TV cooking sensation, Graham Kerr. Known back then as “The Galloping Gourmet”, Kerr’s comedic cooking show became highly successful in North America. Kennedy, then in his thirties, marketed a range of Galloping Gourmet-branded products in over 15 different countries, including cookware, recipe books and specialty foods. During this time, he became friends with book publisher Grolier’s marketing director and learned about the direct marketing trade.
“Grolier had a series called Animal Kingdom, which was their most successful series ever,” he says.
“They underwent a testing phase of more than a year before they actually launched the series. They were testing things like, ‘shall we give the first volume free or charge for it? Should we try a koala on the cover instead of a polar bear?’ and so on.
“They probably did 70 to 80 different tests … then a year later they said, ‘we’re ready. We know everything. We’ve tested everything. We know what to put on the cover, we know how many there should be in the series, we know how much to ask for,” recalls Kennedy.
“They went out and mailed – sold six million books. I thought, this is amazing. You can actually build a business model which is very little risk because you’ve answered all the important questions before you actually go to market. I was fascinated.
“Someone said to me, ‘This, is what you call direct marketing’.”
The Galloping Gourmet ended abruptly in 1971, after a car accident left Kerr temporarily paralysed. A year later, Kennedy sold the GG brand and business to Hasbro industries. Armed with his new-found knowledge of the direct marketing discipline, he returned to Sydney to start his own direct marketing company, called Bond International.
However, things weren’t easy to start with. The advertising agencies back in Australia were hostile and extremely suspicious of Bond. While direct marketing was taking off in New York, the discipline was virtually non existent in Australia during the 1970s, according to Kennedy. Bond was regarded as a “Reader’s Digest coupon” type of marketer, classified as a trader akin to a mail-order business, not as an agency.
“The ad agencies wouldn’t have anything to do with us, not that we wanted anything to do with them either.
“They saw it as a different world, as cut-down, discount, tear ’em out, as damaging the brand and they were incredibly negative.”
Kennedy worked 16-hour days at Bond despite the opposition, selling merchandise and creating offers for consumers. In 1975, he approached credit card company Diners Club Australia with an offer of selling suit bags for travelling business people. The company agreed to place flyers for the suit bag in their credit card statement envelopes for a commission on the sales. As a result of the mail-out, sales of the suit bag increased over 17%.
“No one believed you could sell that many. Diners Club was just blown away,” he says. “They said ‘if you can sell these valet packs, can you sell Diners Club membership packages?’.”
Bond’s success with suit bags led to a flood of major clients for the company, including Diners Club, Qantas and Telstra. Then in the early 1980s, Kennedy introduced a performance rewards system for clients, where payment was made in the form of a commission per unit sold.
Although clients flocked to Bond on the back of the company’s sales results, many were suspicious of a performance-based payment system. Some executives insisted on seeing every piece of copy, “in case we looked like the Reader’s Digest”, says Kennedy. One major corporation even refused to pay Kennedy the unexpected $200,000 Bond International earned on commission (to maintain a long-term relationship with the client, Kennedy relented and reduced the fee).
But most of all, Bond International’s success – from Kennedy’s view at least – alarmed the advertising agencies.
“We were the enemy. We were starting to take revenue away from advertising agencies,” says Kennedy.
“One of the things I find very appealing about DM is that it’s absolutely and totally accountable. There was never any argument over whether DM worked or not. I love that. It’s a bit savage. It’s a bit like playing chess and watching your mistakes all the time,” he says.
One ad executive that watched Bond with particular interest was Geoffrey Cousins, chairman of GPY&R (then George Patterson) in the 1980s.
“In about 1980, George Patterson came to me and said, ‘look this is fascinating, what you guys are doing. Some agencies have had a go at DM and they don’t seem to have what it takes. We don’t want to make the same mistakes as other agencies. Could we make an arrangement with you, where you provide work for our clients, so when one of our clients wants DM, we send them to you?’,” says Kennedy.
Bond International agreed and soon afterwards, 50% of the company’s income was coming from George Patterson’s clients, such as AMP, St. George Bank and NAB. Seven years later, Cousins approached Kennedy with another offer - this time to purchase Bond. Kennedy agonised over the decision. “I didn’t want to sell,” he says. “I liked the business. I was relatively young, in my 40s. We were the best company of our kind in Australia and I suppose all of that’s ego, but I was having a lovely time. I used to run the business like a family.”
However, Cousins continued to push for a sale, turning down Kennedy’s offers to sell 50% of the business, until eventually Kennedy agreed to sell 100% in 1988 (“I don’t know why, but I just thought I would,” he says about his decision).
Kennedy moved with his family to Paris for a short period afterwards, returning as part-time chairman and eventually chairman of Bond. In 1995, at George Patterson’s request, he developed the first integrated direct marketing resource for the agency, a resource which currently has over 70 dedicated direct marketers based in Sydney, Melbourne and Brisbane.
Kennedy’s work for the direct marketing sector of George Patterson led to his most memorable client – the Sydney Organising Committee of the Olympic Games (SOCOG). Kennedy’s team was responsible for ticket marketing and below-the-line activity. They eventually sold 92% of seats available – the most successful ticket sales in the history of the Olympics – it helped earn Kennedy a Medal of the Order of Australia, as did his charity work.
“It wasn’t easy – the games had never been held before in a minor market, they had only been held in North America or Europe somewhere, so people were sceptical about whether we could sell that many tickets in the Australian market,” says Kennedy.
“So we brought DM to the Olympics – something that had never been done before. We used all of our Reader’s Digest techniques on the Olympic Games and the rest in history. I spent most of the Olympics arguing and negotiating, but it was a great achievement for my team,” he says.
Currently, Kennedy has no plans to retire from the marketing game. Aside from his work for GPY&R, he is a prolific international public speaker, the only independent director on the board of The Direct Group, and the author of The Power of One to One – a marketing book co-written with Bryce Courtenay and published in 1995.
Kennedy has also served for 18 years on the board of the Starlight Children’s Foundation, currently as national president. “I have a son who has an incurable disease, not terminal, and so when he was three I started spending time in children’s hospitals,” says Kennedy.
“I just love Starlight, it’s a very important part of my life. We’re not social, we’re not political, we’re not religious, we don’t have any ambitions to be the biggest and every time we get into a bind we go, what’s right for the kids?”
And Kennedy still feels strongly about what he does, not to mention the young talent he nurtures.
Victoria Curro, managing director of McCann Sydney, first met Kennedy as a green account manager at George Patterson and describes him as possessing a wicked sense of humour. “I cherished having Ian as a mentor,” she says.
“He has had a hugely positive impact on my career. I learned a lot from him and his experience but more than that, he pushed me, challenged me and gave me confidence to grow.
“I knew he always had my best interests at heart and never played politics or bullshitted me, the agency or the clients. There are too few people like him in our industry.”
From the Father of the Direct Marketing, the industry expects no less.
