Second City, Second Thoughts

CHICAGO JWT’s 80-plus year relationship with Kraft was not only a defining account for the agency, but one that characterized the traditional Chicago school of advertising: 30-second TV spots built for commodity products marketed by a conservative Midwestern client. Such work from JWT and its big agency peers in Chicago was often dull, but always durable. Let their corporate brethren on the coasts create the edgy stuff; these shops were lynchpins to the locally based packaged-goods multinationals that helped subsidize holding company operations around the world.

With last month’s loss of $200 million in Kraft billings, JWT’s former corporate flagship—where past Thompson global CEOs like Joe O’Donnell and Burt Manning held leadership roles—finalized its long, slow slide into becoming a satellite office of a larger global network. And two other WPP Group sibling agencies, Ogilvy & Mather and Young & Rubicam, have struggled to expand beyond one or two core clients. JWT could not be reached by press time; Ogilvy declined comment.

While few are ready to declare the death of the Chicago agency community, there is a growing consensus that the country’s second-largest ad market needs to create a new identity, bringing its traditional strengths into a digital era.

But where is Chicago on the American marketing landscape? New York is the center of the global advertising world. Los Angeles boasts world-class production capabilities. Outposts like San Francisco, Portland, Ore., Minneapolis and Miami lay claim to some of the industry’s best talent. But Chicago’s historic ability to tap into the heartland values of Middle America—most typified in Burnett’s whimsical doughboy fetishism—now seems like an anachronistic throwback.

Agency executives within and outside the city dismiss assertions that it has lost its mojo, noting that the entire industry is going though an upheaval. “I think the Chicago blahs are just that. This business is always cyclical. San Francisco was dead for almost 10 years, and now it’s hot again,” said consultant Linda Fidelman, ADvice & ADvisors, New York. “The only real disadvantage I see in Chicago is that there does not seem to be any hot indies, and with the big boys down, there is no talent in development to help turn things around.”

With characteristic Midwestern optimism, Chicago practitioners say all the city needs is some high-profile new business wins and the kind of work capable of generating a “Whassup” beer buzz. But agency execs admit the city needs to better define, and raise, its profile in the U.S. ad scene, showcasing what the Chicago shops do that others can’t, or won’t. Failing that, even home-grown powerhouses risk marginalization. Two of the city’s largest players—Leo Burnett, with whom the city is inexorably linked, and DraftFCB—are working to redefine their offerings, moving the less-sexy marketing services closer to their traditional ad counterparts (even if the latter’s initiative admittedly owes more to IPG’s merger habit than to strategy).

Any regional market grapples with business cycles. Boston, for instance, is beginning to reassert itself, thanks to a few key wins like Arnold’s portion of Volvo’s $150 million global account. And some of the Windy City’s agency problems are indeed systemic. Network agency offices in the field also contend with the reality of a larger industry shift in gravity: More and more big accounts are being handled by New York City headquarters, thus making regional growth difficult because of conflicts. In addition, Chicago, which once relied on a geographic advantage of being in close proximity to many clients, has lost that selling point as location is no longer an issue.

“The advantage of proximity is no longer a big advantage, because even crossing the street takes too long in the age of the BlackBerry,” said Alan Gottesman of consultancy West End Communications and an Adweek columnist.

Randy Wagner, CMO of Chicago-based Orbitz—which in November moved its $50 million creative account from the local office of WPP Group’s Young & Rubicam to Mullen in Wenham, Mass.—confirmed that the incumbent’s location afforded it no advantage. “Locale had nothing to do with it,” she said. “We had narrowed the field to three agencies, and two were from here. The work from here was almost equal to what we had. If it had been equal, the decision would have been different. ”

While Chicago network agencies reconsider their growth strategies, the kind of independent community that could give the city and edge beyond packaged-goods work has never fully materialized. “You haven’t had a Goodby or a Deutsch catch fire,” said one agency executive. “Cramer-Krasselt’s the closest, but they’ve kind of grown up slowly.”

By nature, those kind of shops fly in the face of how the city made its name. Think “Chicago advertising” and the populist whimsy of the Jolly Green Giant is more likely to come to mind than the breakthrough appeal of C-K’s CareerBuilder chimps or DDB’s “Real Men of Genius” for Anheuser-Busch.

“With the exception of DDB, the ideas of Chicago, innovation and creativity are mutually exclusive,” said one New York source at a DDB rival. “The market perception is that the work is dull and workmanlike.”

DDB CCO Bob Scarpelli, a 29-year veteran of the Chicago market, allowed that its reputation is a bit “diminished” at the moment, but believes it’s just a temporary case of doldrums. “There’s some excellent work being done in Chicago, but just not enough of it. [The community] has to make the commitment to reinvent itself and bring in talent.”

Scarpelli underscored that in recent years, DDB Chicago has won three Grand Prix awards at Cannes, and that the office, which handles global accounts such as McDonald’s and Anheuser-Busch, rivals Paris as the largest office in DDB’s global network.

Earlier in the decade, Chicago attempted to reinvent itself as a creative destination. Several agencies, including Leo Burnett, Cramer-Krasselt and DDB, hired talent from the coasts in an attempt to better their work and alter the city’s perception as a place where creatives go to cash in. Many of those transplants have long since set sail from Lake Michigan’s shores. “Real serious talent doesn’t want to live there. There’s been a whole roster of people who have gone there and left after a year and word gets out about that,” said one New York HR executive. “Nine out of ten good creative people from New York and L.A. won’t take a Chicago job.”

Given those perceptions, some are suggesting the city should play to its strengths and not try to radically change its creative profile.

“Yes, we’re about selling, and yes, we’re pretty direct about communicating to the consumer, but we can be as engaging as anybody and have a real sense of brand,” said Tom O’Keefe, CCO, DraftFCB Chicago. “We should be packaging that and presenting it as something we can be proud of, as opposed to trying to be something we’re not.”

O’Keefe, for one, said the city’s agencies should embrace their connection to Middle America culture, and not just through advertising. “Look at Saturday Night Live and how Second City has been a farm system for them,” he said. “I think what people learn here is to find a hook and how to connect with others—the masses, the populous—but doing it in a way where it’s endearing and memorable.”

There’s one local capability that could serve Chicago well in the fast-changing communications business: marketing services, research and data collection. “There are a lot of successful marketing services companies out there. There are a lot of quality direct marketing companies, and at a time when it’s all about accountability, you’ll be seeing more and more [acquisition] transactions,” said Abe Jones, managing director, AdMedia Partners, New York.

Chicago firms are forging close working relationships between general agencies and their direct counterparts. In addition to Draft-FCB, Burnett CEO Tom Bernardin combined traditional agency Burnett with DM and promotional sibling Arc into one P&L. Euro RSCG has added direct business from Sprint and traditional work from Circuit City since similarly refocusing its operations.

But it’s too early to determine whether these initiatives will bear fruit. “They’ve got to get to it fast,” said one exec. “You can’t run big agencies with siloed practices.”

If there’s one area where the city clearly is lacking, it’s in the digital space. “We’re not as good in new media as we should be,” allowed one agency exec. “We’re a conservative stock, and we’re good long term. But sometimes, we don’t jump on trends when they can be good trends to jump onto.”

Given the city’s historic commitment to direct marketing, some networks are using local offices to develop integrated campaigns. Ogilvy, for one, is increasingly doing more digital and direct work out of its OgilvyOne unit in Chicago, including new efforts for BP and work on Allstate, sources said.

Y&R global CEO Hamish McLennan also sees his Chicago office as a valuable creative resource. The agency developed the SOS concept to brand Al Gore’s climate change concerts this summer and shot its commercial. Y&R CCO Mark Figliulo even came up with the idea for a Spinal Tap reunion. “We could have done [Gore’s project] in New York. But Chicago is a quality offering, one of the best offices we have. There’s enormous potential there.”

While other markets outside New York play up their creative awards, execs at Chicago agencies stress that they’re not afraid to roll up their sleeves. They underscore their willingness to take on challenging client categories. Working with several fast-food, beer and packaged-goods clients, these shops have thrived in difficult, and in some cases, like tobacco, heavily regulated, categories. It’s no coincidence that the nation’s three largest brewers all have business in Chicago, noted one agency exec.

Miller Brewing has several agencies in Chicago, ranging from Y&R, which handles creative on its $70 million Genuine Draft account—and is in the hunt for the $175 million Miller Lite/High Life business now in review—to Publicis Groupe shops Starcom, Arc and Digitas, which handle media, promotions and digital marketing.

“They are on par with, and in some ways, better than any of the agencies in many of those areas,” said Deb Boyda, vp, content for Miller. “The beauty is they’re really straightforward people that you like to collaborate with.”

Those shops may like to collaborate with clients, but when it comes to its peers, it’s another matter. In a city where many of the biggest agencies are jockeying to get an upper hand on shared accounts like McDonald’s and Kraft, that’s perhaps not surprising. But does it have an effect when the city needs to tout itself?

“What is lacking here is industry spirit. That’s always been a problem,” said Peter Krivkovic, C-K CEO. “You find bigger industry spirit in Kansas City.” Marlena Peleo-Lazar, CCO for McDonald’s and co-president of the Chicago Advertising Federation, said the industry group is aware that the city has no centralized proponent, and is looking to rectify it.

And though outsiders may sniff at the heartland, “get-it-done” orientation of Chicago agencies, the city’s shops may be well poised as clients become more results driven. The city, they say, has built a reputation of engaging consumers, while not being afraid to sell.

“Chicago agencies have always done work that people like to see, like to talk about. It’s never been too pretentious, it’s a sensibility people like—not art for art’s sake,” said Scarpelli. “It’s a Midwestern work ethic. There’s more of a willingness to be in tune with the world—not a lot of ivory tower there.”