Hosting a "gifting suite" wasn't something Natasha Koifman had ever considered doing. It wasn't that the public relations executive was unfamiliar with the concept of giving celebrities hot new fashions and high-tech toys in the hopes they'll love a product and give it some free publicity.
After all, she'd been working the public relations circuit for almost 10 years, four of them running her own PR firm, Toronto-based NKPR.
But it wasn't until one of her clients, outdoor-gear maker Timberland, told NKPR that it had been approached to participate in other gifting suites at the Toronto International Film Festival and asked if the agency would host one of its own, that Ms. Koifman thought about doing it.
Gifting suites, long popular in the United States, were catching on at star-studded events such as TIFF. Typically, an event company or PR agency recruits a handful of brands to put some of their newest and most popular products into a space, often a hotel suite, in a sort of mini-store. Celebrities are then invited to the suite, where brand representatives talk up their wares.
What the celebrity likes, the celebrity keeps - with the goal being that they will be photographed with it or talk about it publicly. There's no guarantee the famous face will promote the product, of course, but staging gifting suites at big events boosts the chances: The stars are already out and about being photographed and interviewed, Ms. Koifman notes.
Timberland had been with her agency for two years and Ms. Koifman isn't one to disappoint. "They asked if we'd consider doing it and I thought, let's try this," she says, thinking at the time that this endeavour would simply be a solution to a client's need.
In March, 2006, she dedicated four employees (two-thirds of her staff) to start work on NKPR's first gifting suite, dubbed the It Lounge, which would take place in a 400-square-foot suite at Toronto's Windsor Arms Hotel.
"I had no idea how much work it would be," she says. "I thought this would be like putting on an event. It's just renting a space and getting our clients in there and contacting the media."
She quickly realized it was far more complicated. NKPR had seven clients and about 30 products in the first It Lounge. "It was a lot like opening seven little stores."
First, she had to find clients to participate in the It Lounge for a fee (it can cost a brand about $40,000 to participate in a multiday gifting suite, what with staffing and product costs). Timberland was a given, but NKPR had to shop the idea around to bring in other brand names. Participants in that initial It Lounge included electronics and appliance manufacturer LG and beauty product company Kiehl's.
NKPR worked with each client to select which products, typically three to five items, would be showcased. Each client is given a small area that they stock as they like, under NKPR's supervision. "We want each brand to have a unique feeling but the entire space has to flow," she says.
Ms. Koifman arranged to have a media centre alongside the It Lounge, where members of the press could take a break from the film festival to check their e-mail or just recharge. (Reporters are also invited to the lounge on opening day, and are offered free gift samples.)
The It Lounge also had a charity component: NKPR offered celebrities the option to donate their gift bags to Big Brothers Big Sisters.
A few weeks before the film festival, NKPR began to invite specific movie stars, through their publicists, to the It Lounge. "We work with our clients to determine who their target audience is and then reach out to the appropriate celebrities," she says, adding: "We have a lot of great relationships with publicists that we work with in Canada and the U.S., so it helps that we've been fostering these relationships for years."
Ms. Koifman spent six months and about $50,000, factoring in time and labour, to launch her first gifting suite. "I had no idea if this would work," she says. "There was a lot riding on this for us."
If the It Lounge failed, she felt she would not only be putting her reputation in jeopardy but also her clients' loyalty. "What if we didn't deliver what we promised? We're in a results-driven business."
But the first It Lounge was a hit at TIFF, and has been each year since. About 100 celebrities come through the suite at each festival, such as Paris Hilton, Queen Latifah and Scott Speedman.
"Will every celebrity like every product? No. Will they like one or two? For sure," she says. "It's about connecting and introducing celebrities to brands that might be new to them."
At the 2007 It Lounge, filmmaker Paul Haggis was introduced to confectioner Heart Chocolate. He stocked up on the Toronto-based company's sweets and liked the treats so much that he became a shareholder. (Toronto gourmet grocer Pusateri's also heard of Heart Chocolate thanks to media coverage via the It Lounge and began carrying its products.)
In 2008, the It Lounge featured sports brand Fila. George Stroumboulopoulos, host of the CBC television show The Hour, fell in love with one of its jackets. "A week later, he was wearing it on the show," Ms. Koifman says. "That's the 360 degrees of success the brand is looking for."
Ms. Koifman has recruited companies specifically to participate in the It Lounge, several of which have stayed on with NKPR, including Kiehl's, Fila, hair styling tools and accessories brand Goody, and sports-gear maker Brooks.
She says the TIFF event now costs her company well into six figures each year. But the payoff is worth it: NKPR has increased its client base by 27 per cent thanks to the It Lounge, boosting revenue by 31 per cent.
But it's the boost to reputation that Ms. Koifman most values. The It Lounge showed clients that NKPR isn't afraid of risks, she says.
"Initially, I wasn't thinking this is a good thing for NKPR. Initially, I was thinking this is a solution for our clients. It's interesting that this became a breakthrough for our company."
Know a business that has experienced a big breakthrough? We want to hear about it. E-mail: nhulsman@globeandmail.com
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STAR STRUCK
A sampling of celebrity endorsement deals:
Catherine Zeta-Jones, T-Mobile: $20-million
Angelina Jolie, St. John:
$12-million plus
Nicole Kidman, Chanel No. 5: $12-million
Jessica Simpson, Guthy-Renker: $7.5-million
Gwyneth Paltrow, Estée Lauder: $6-million plus
Charlize Theron, Dior:
$6-million
Julia Roberts, Gianfranco Ferré: $5-million
Brad Pitt, Heineken: $4-million
Scarlett Johansson, L'Oréal:
$4-million
Source: AdWeek, 2006; all figures U.S.
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SNAPSHOT
THE VITALS
Natasha Koifman launched NKPR in 2002 with one goal: "I wanted to pick and choose the brands I worked on." Initially, she had just one employee and two clients. Today, NKPR, which represents companies from all sectors, has 20 clients and 15 employees.
THE INTRIGUING IDEA
One of the biggest benefits of the It Lounge, Ms. Koifman says, is its effect on her staff. "It's a great opportunity to build
employee morale," she says. "Here we are working 18 hours a day on this and you come out of it really feeling like you had this amazing accomplishment and you did it as a team." That's particularly valuable to Ms. Koifman, who says creating a team
environment in her workplace is a priority.
THE KEY DECISION
"It was saying yes to Timberland [to create a gifting suite]when I really didn't know what I was saying yes to," she says. "I just thought, okay, we'll make it
happen." It turned out to be far more work than she'd imagined. But the payoff for both her
clients and NKPR was equally big.
THE OVERSIGHT
"In year one, we had four people [working]in the It Lounge," Ms. Koifman says. She's since tripled the number to 12. "And it's not that it's any more work, that's just what the manpower required actually is."
THE MARKET
It's impossible to put a value on celebrity endorsement, experts say. But one thing is clear: Brands will pay big dollars for a famous face. That's why landing that visage for free, through
tactics such as gifting suites, is popular.
THE NEXT STEPS
"We're already gearing up for It Lounge 2009," Ms. Koifman says. The company recently opened a satellite office in New York and plans to build its U.S. base, which currently accounts for about 10 per cent of NKPR's business.
Rasha Mourtada