Selling Behind the Scene : Irvine Promoter Ranks as No. 1 in the Nation

When you see that new Burger King commercial in which a hyperactive camera captures snippets of the MTV generation, you probably realize some shrewd advertising agency created it. But when your child gets a Donald Duck toy with her “Kids Club” meal, you might assume Burger King itself cooked up the gift idea.

Such is the role of a promotion agency--to hover behind the scenes, supplementing conventional ad tactics with more understated come-ons.

With an impressive roll of clients that includes Jell-O, British Airways, Mitsubishi and the aforementioned Burger King, an Irvine firm has quietly made itself the biggest promotional marketing agency in the nation. A recent survey by the trade magazine Advertising Age ranks Alcone Sims O’Brien as No. 1 in its niche, with 1992 revenue of $48.8 million.

“I hate to sound this way, but there are very few people who have not touched the products we touch,” said Matthew R. Alcone, the company’s chairman and chief executive.

Anyone who has bought a California Lottery ticket in the past two years has not only touched but also scratched the handiwork of Alcone Sims O’Brien. The company designs Scratcher games and last year introduced Keno--a quicker version of Lotto in which winning numbers are relayed on a video screen every five minutes in taverns and bowling alleys.

Alcone Sims O’Brien signed on at a time when public interest in the lottery was waning. The agency helped implement such changes as offering a variety of Scratcher games simultaneously, prompting customers to buy multiple tickets.

Scratcher sales have gone up almost 50% since Alcone Sims O’Brien came on board, said Denise Kimes, marketing manager for the California Lottery. “It is difficult to put a finger on what they’ve contributed to our sales gain, but Alcone has been involved in virtually every marketing strategy we have,” she said.

Previously, the Lottery relied solely on its ad agency to devise promotions as well as commercials. “It was too much for one agency to handle,” Kimes said.

Other Alcone Sims O’Brien promotional campaigns include:

* A “Snack-tivity” calendar, with recipes for jiggly green and orange desserts on every page, free with three purchases of Jell-O.

* The British Airways “Privileged Traveler Program,” which offers senior citizens discount packages and other perks.

* Isuzu-labeled merchandise--key chains, calculators, hats and coffee mugs--with which dealerships can reward car buyers.

Of all his many brainchildren, Alcone said he is most proud of the Kids Club. Young customers join the club by filling out a form at a Burger King. In return they receive membership cards, a quarterly comic-book newsletter and windup Disney characters with their orders.

Since starting the program in 1990, Alcone’s company has amassed the names, ages and addresses of more than 4 million children. “It’s the largest proprietary database of kids in the world,” Alcone said.

That underscores promotional marketing’s biggest advantage: It can keep tabs on the customers it reaches.

“With advertising budgets being slashed all over the place, advertisers are looking for tangible ways to measure their investments,” said John Good, publisher and editor of California AdNews, an industry magazine based in Newport Beach. “Promotional advertising allows that. You know exactly how many units (such as Jell-O calendars) you’re distributing, and you can keep track of the response you’re getting.”

As network television has met mounting competition from cable stations and video rentals in the past 10 years, promotional marketing has increased in popularity, Good said. “It’s hard to beat the effectiveness of a TV spot because of the sheer number of people exposed to the message,” he said. “But even so, that effectiveness has eroded in recent years.”

Promotional marketing has other appeals as well. It encourages repeat business through such methods as frequent-flier programs for airlines. And its so-called clubs make customers feel special.

“Part of its success is that it’s subliminal,” Good said. “It generates good feelings toward the advertiser in ways that traditional broadcast ads can’t.”

Or, in Alcone’s words: “Advertising is the invitation to the party. Promotion is the party.”

In 1978, at the age of 24, Alcone founded Alcone Productions. The Anaheim native had recently graduated from UC Irvine, where he helped pay bills by doing promotions on campus for ski stores.

Thanks to a former business contact, Alcone swiftly landed a big client--Isuzu. Alcone Productions steadily grew, and by 1990 the company took the lead as the largest of its kind in the United States.

Its climb since 1988, when the agency had revenue of about $10 million, has been nothing short of meteoric, partly because of its Burger King coup. Then two years ago, holding company Omnicom Group bought Alcone Productions and merged it with a New York agency. The merger brought a few more big clients--including Pepsi, General Electric and Polaroid--under Alcone’s domain.

Though he would not disclose the selling price, Alcone allowed that Omnicom paid “millions and millions” for his company.

Alcone Sims O’Brien has a staff of 100 in Irvine and another 80 employees in New York.

“My commute is New York,” Alcone said. He routinely flies cross-country midweek, then makes it home in time to spend weekends with his wife and three children in Laguna Beach.

The bicoastal agency is a one-stop mall of promotional services--from strategic planning to the actual design of such customer baits as coffee mugs.

Alcone sums up his company’s role in universal terms: “We put the toy in the Cracker Jack box.”