Q&A: JWT’s David Eastman

JWT’s David Eastman made his first acquisition as worldwide digital director last week and expects to make more in the next 18 months as he pursues a three-pronged strategy of acquisitions, recruitment and staff education. In an interview with senior reporter Andrew McMains, Eastman explains the rationale for buying the San Diego-based Digitaria, why he’ll keep it separate from JWT and why social media shops are next in his sights.
 
Adweek: Does Digitaria want to expand outside the U.S. and is JWT amenable to that?
Eastman: It’s certainly in the cards. Yes, what they would like to do is use the JWT footprint and client base as a way to expand their business. And from speaking to some of their clients, it’s clear that if they were able to offer the same capability in other parts of the globe, there would definitely be more work for them. So, the intention is really to first of all look at them getting more of a base in New York, so it’s easier for them to work with us here. And then, longer term — let’s walk before we can run — expand internationally.
 
Why keep them separate?
Because [Digitaria CEO Dan Khabie] and I, his management team and some of the key people from here spent quite a lot of time talking about how this is going to work. And [Khabie and I are] both long enough in the tooth that we’ve seen these things not work well in the past when “big ad agency acquires smaller digital agency.” So, we feel that the best thing to do initially is to keep them separate, understand more about each other’s culture and figure what the DNA is. But longer term, I would imagine that we will become closer and more integrated. However, what’s important is that while they’re on an earn-out, they’re actually in some ways masters of their own destiny. So, certainly for the period of that, they will remain branded Digitaria.
 
How long did you talk to Dan?
About five months. . . . When I was in the process of changing roles (from worldwide digital director to North American CEO, in March), this was something that was on the radar. But I accelerated it once I became CEO.
 
How does the deal fit into JWT’s broader digital expansion plans?
In terms of getting digital talent and DNA into our business, there are multiple strategies that we’re following. One is acquisition, two is hiring key digital people into this business and three is educating the people already in the business. And we’re actively pursuing all three. So this is going to be the first in what we hope is going to be several acquisitions over the next 18 months. And we’re planning some fairly significant digital hires over the next couple of months. And we have a fairly substantial education program. It has already rolled out in the U.K. It’s something that I was doing in my previous role that will be coming to New York with a company called UTalkMarketing. The idea is that everybody in the organization will eventually go through this.
 
Why does an agency need to own a shop like Digitaria as opposed to use it as needed?
The answer from our perspective is you need to think about the base from which we’re starting. We are starting from a predominantly traditional approach to communications and . . . we need to have internally sufficient experience in this space in order to be able to talk to our clients in the right way. Then, I think it’s a case where we might need to bring in deep (specialists) — whether that’s in mobile or shopper marketing — whatever the specific area is. But until you have a degree of understanding in the business itself, it becomes more difficult to find partners to work with. History has shown that unless you understand and have a degree of wanting to be able to understand this work on your clients’ behalf, the ability to partner is actually quite small because you don’t necessarily know what you need in the first place.
 
If you analyze JWT in North America and say, “OK, what percentage of skills are digital?” there needs to be a baseline that we need to get to before we can say, “From now on, we can afford to partner with people because we have enough understanding and experience internally to know what this is all about.”

 
What other digital services are you looking to add or bolster through acquisitions?
Social and community is a big one. We obviously have skills in-house already, but it seems that . . . when we respond to (client) briefs, more and more of that brief is around generating movements or forming communities around brands or using the brand as a platform to form a community. There are some really some interesting specialist agencies out there and (that’s) certainly something that’s on the shopping list.
 
Digitaria is known for its Web site development.
That’s what I thought going in. Actually, they’re a much more sophisticated organization than that. By that, I mean Web sites and platforms are really where they started from, but ultimately the design-and-build business is really Web 1.0. And this is very much more a progressive Web 2.0 organization because analytics and consulting about analytics is certainly a big part of their business. That takes them into performance marketing as well as all the things you associate with Web-site build, which is user-interface design and visual design. So they’re doing in-store products and taking the ability to be able to design great user interface and actually saying, “Well, that’s just as applicable on mobile and in-store kiosks now.” They’re a much more rounded organization than just saying “design and build.”
 
Is Huge among their competitors?
When we talked about their competitors, they did mention that.
 
Any others that pop to mind?
What’s interesting is it’s a very blurred world at the moment. It depends what you’re talking about. They might be going up against — if we’re talking about analytics and consulting — the big sort of Digitases of the world. And then from the more creative side, there’s probably The Big Spaceships. They’re 100 people. That’s a decent size. So they find themselves competing with an array of agencies.
 
Did you approach several players in this space?
We’re always talking to people. . . . We’re particularly interested in social media organizations, digital creative agencies and anything that has an analytics- and ROI-based practice. It’s probably fair to say that we’re always looking. . . . Ultimately, we turn away many more things than we actually say “yes” to. It was the right time for Digitaria. . . . They want to go to the next level. We very much like them as an organization, from a chemistry and relationship point of view. My experience tells me that this is much more about chemistry and relationship more than anything else.
 
How do you gauge that?
I don’t think there’s anything other than spending time with people. We flew to San Diego and we spent several days there talking to the guys. We’ve been out to lunches and dinners. And they’ve been here and spent time in the office. It was a sort of long courting process.