Building Brand Value the Playboy Way

Say what you will about Hugh Hefner, the man had a vision, took the steps to make the vision become a reality, and succeeded despite the challenges he faced. It can’t hurt that he has an IQ of 152—genius level, which was determined through an IQ test he took as a child. Truth be told, intelligence can be a benefit or a liability when it comes to being an entrepreneur. While it can help a person make sound decisions, it can also prohibit him from taking risks. It goes along with the old adage, “too much information can be dangerous,” but in the case of entrepreneurs, too much information can be limiting because it can create artificial barriers. The best entrepreneurs can balance the facts, risks, and potential rewards to make sound business decisions. Hugh Hefner brought the tools of intelligence to the table, but when married with his belief in his product and his ability to accept risks, his men’s lifestyle magazine grew to become one of the most iconic brands in modern history.

The first week of December 1953 marked a time that would change Hugh Hefner’s life and the lives of people around the world in the coming decades. As 70,000 copies of Playboy’s inaugural issue made their way to newsstands, a 27-year-old Hefner crossed his fingers and hoped the rest of the world was ready for it. The new magazine Hefner delivered took his much-adored Esquire to the next level—a level he thought young men were prepared to enter with him. The repressive social morés he grew up with were representative of what he referred to as a “hurtful hypocrisy” from which he hoped to free the world. Would the world be ready for it?

While spending a great deal of time defending the Playboy brand in the 1960s, Hugh Hefner’s role as the face of the Playboy brand also grew. He seized opportunities to defend the Playboy Philosophy in magazines and newspapers and on television. A Canadian documentary about Hefner called The Most premiered in 1961, and Hefner appeared on television shows as diverse as Warren Buffet’s Firing Line to The Tonight Show and Laugh-In. Articles and interviews with Hefner appeared in magazines and newspapers as varied as BusinessWeek, Barron’s, Newsweek, and Mad magazine. Hefner and Playboy were everywhere, and as Hefner’s star rose, so did Playboy’s earnings. In the 1960s, Hefner became the very thing that enamored him most during his youth—a celebrity.

As the 1960s, a decade when Americans clashed over numerous social and political issues, came to a close, Playboy found itself with a vision quite unlike the one it had in 1953. No longer dedicated to advocating a specific lifestyle for men, in the 1960s, Playboy advocated liberal thinking and politics while living a life of self-gratification at the same time. As the public rallied around causes related to freedom and equality, Hugh Hefner and Playboy led the way and became more influential, and more controversial, with each passing year. With notoriety, often comes backlash, and Playboy positioned itself to be at the center of that backlash throughout the 1970s.

In February 1970, Hugh Hefner’s private DC-9 jet, named Big Bunny, took off on its inaugural flight from Chicago to Los Angeles. On board were a crew of Jet Bunnies and ten reporters in addition to the Playboy brand champion and a bevy of friends. The Playboy lifestyle had grown so big that the ground could no longer support it, and the party took to the sky. Inside the plane, a Playboy Club was born. The plane was designed to look like a flying apartment with a disco area, game area, movie area, music, food, drinks, and women. At a time when very few companies used private jets and even fewer individuals owned one, Big Bunny represented the epitome of extravagance, and it was just the first step in Hugh Hefner’s quest to position himself as a successful celebrity living the Playboy fantasy.

Playboy Enterprises found itself in unfamiliar and uncomfortable territory during the latter half of the 1970s, but problems for the brand would get worse very quickly. The 1980s brought a new focus on conservatism in the macro environment that reached across the United States and affected all parts of the Playboy company. Had the brand not been so strong and so well-recognized around the world, with a loyal base of existing consumers, the 1980s could have been the end of the company.

While Playboy Enterprises was plagued with financial, political, and social challenges throughout the 1980s, Hugh Hefner, as the brand champion, was always targeted at the heart of the controversies around the brand. A new conservative movement marked the political, religious, and social views of the decade, and Hugh Hefner and the Playboy brand’s public links to sexual liberation and drugs were the topic of choice for many Americans. The cloud hanging over the Playboy brand would get darker before it would clear.

The 1990s began with a new set of problems for the Playboy brand. With its brand champion, Hugh Hefner, married to Playmate Kimberley Conrad and settling into domestic life, the brand was left without a vocal advocate. Consumers were confused by the inconsistent message being sent by the Playboy brand and its living embodiment. In the early 1990s, Hugh Hefner reinvented himself for the fifth time, but this time it was like nothing anyone had seen before or could have predicted. Former self-reinventions had taken the form of obsessive workaholic and aggressive partier, but the transformation in the 1990s was in stark contrast to the brand message he advocated for the four decades previously.

Since Hugh Hefner proposed to Playmate Kimberley Conrad in July 1988, the Playboy brand champion was absent from the spotlight where, for four decades previously, he had played a significant role in the growth of the company behind the brand. Few other brands in history had such visible and vocal brand advocates and brand guardians as Playboy did in Hugh Hefner. Much of the world saw Hugh Hefner as the living symbol of Playboy and his absence in the 1990s did not go unnoticed by consumers. Furthermore, the highly publicized changes at the Playboy Mansion discussed in Chapter 14, which had long been regarded as Disneyland for adults, added to the confusion and further clouded the Playboy brand message. Hefner’s vocal and physical denouncements of the lifestyle he led prior to marrying Conrad in 1989 were heard around the world, and many loyal customers were confused by a brand that struggled with living its own promise in the 1990s.

With the start of a new century, Playboy Enterprises began to see the light at the end of a long, dark tunnel. The beginning of the 2000s brought a revived Hugh Hefner back to the spotlight as the ultimate brand champion, and a new generation of consumers was very receptive to his return. At the same time, Playboy TV was thriving and Playboy magazine, while much smaller in terms of circulation than it had been 20 years earlier, was still the number one men’s magazine. Playboy.​com was growing quickly, and an expanding global audience was gaining access to the Playboy brand through a variety of distribution channels.

The start of a new century placed Playboy Enterprises in a positive position. The resurgence in the brand’s popularity among a new generation boded well for the company’s short-term growth. However, that growth would be short-lived. Much of the turnaround would occur due to a changing macro environment and rapid technological developments that caused consumers to shift their preferred distribution methods faster than Playboy Enterprises was prepared to handle. Those technological developments opened the doors for increased competition from low-cost providers, which Playboy Enterprises did not foresee. In short, Playboy Enterprises found itself in a reactionary position again, trying to catch up with new competition and the world that was quickly changing around it.

As the first decade of the 2000s neared its end, Playboy Enterprises existed as a mid-size communications and entertainment company with questionable growth expectations. Its stock price dropped in 2008 to a record low (as did many other companies’ stocks due in part to weak economies around the world negatively affecting all aspects of business). It was a position the company had been in before in 1976 when its stock price dropped to just $4 per share. While the Playboy Enterprises’ stock price was falling in the late 2000s and many other men’s magazines were folding or being sold, the Playboy brand remained strong. In fact, the Playboy brand was experiencing a resurgence in popularity that Playboy Enterprises could leverage to stay afloat and strategize for the future.