LOS ANGELES With its rebranding effort more than a year old, GSD&M Idea City appears to be on the road to recovery following some devastating financial and psychological losses.
In the last days of 2006, Austin, Texas-based GSD&M lost the $570 million Wal-Mart account. Six month later, AT&T consolidated its $2.2 billion account at the agency's Omnicom Group sibling, BBDO, stripping GSD&M of its lead creative and media duties but leaving it direct response TV and some other assignments.
That one-two punch began a dark time for the agency that boasted billings of $1.8 billion in 2007, but suddenly found itself trimming its workforce by at least 10 percent and desperately seeking a way to make up the lost revenue.
"Historically, the agency had been on a long growth path throughout the '90s until '06 and '07," said COO Duff Stewart, 47, who assumed the presidency in August 2007 as the shop added "Idea City" to its name as part of a push to launch a more positive era. "We've had challenging times. We had to make tough decisions and get our house in order."
For GSD&M, Stewart said, "purpose-based branding" meant helping Southwest Airlines understand that it was "not in the airline business but the freedom business," offering travelers low-cost liberty; repositioning BMW to stress its independence and brand unity, so ideas could come from anywhere in the company to support the "Ultimate Driving Machine" mantra; or discovering that Popeye's distinction was bringing Louisiana slow-cooked recipes to a fast-food world.
The agency applied so-called purpose-based branding to itself as well, said chairman Roy Spence, who adopted the idea from Jim Collins and Jerry I. Porras' Built to Last. GSD&M added a Purpose Institute think tank in 2006, and Spence wrote a book about the subject that will be issued next spring.
Spence, now 60, acknowledged that it is a new version of his "value-based" branding of some 15 years ago, when he wrote a piece called "What You Stand for Is as Important as What You Sell."
"I sensed that everyone was selling the same thing," Spence said. "We started believing that the values of the organization would drive the business beyond the need for good product, good pricing, good people. It was powerful."
Purpose goes beyond that, Spence said, "the deepest river you can brand on ... In this turnaround, we've asked what Collins did: Can we articulate our purpose as an agency?" Spence said GSD&M is not a traditionally defined ad agency but "only in business to build our clients' business. And we'll do whatever it takes."
Two of the agency's longtime clients contend there is something more to the purpose-based branding than just marketing-speak.
Said Monica Gattoni, senior manager, marketing, at Southwest Airlines: "For us, it means figuring out what your company is about other than making money, which is 'freedom.'"
Tim Finchem, commissioner of the PGA Tour, said: "We're trying to marry up our messaging with purpose, putting on world-class professional tournaments, raising money for charity and protecting the image of the game. That gives us the ability to differentiate ourselves."
In February, signaling his potential creative heir apparent, Spence hired as ecd Mark Taylor, 35, from MDC Partners' Crispin Porter + Bogusky. GSD&M had been looking for a group cd for its $155 million BMW account, Taylor recalled, "when the discussion grew."
Taylor said GSD&M had the right history, culture and mind-set to prompt the move. "I'd been wanting to go further upstream in the strategic realm," Taylor said. "Purpose-based branding goes beyond the category the client is in, beyond the execution of ads, something that makes them have a bigger cause, to make a difference."
Though no billion-dollar opportunities have come around, Stewart said after "a couple of losses that set back perceptions, wins make the glass look half full."
The agency has added significant new business, including HD Radio Alliance ($230 million over three years) and assignments from AT&T, John Deere, Hallmark, Popeye's, Compass Bank and Marshalls, among others. It also successfully defended its U.S. Air Force account in a review.
With Taylor aboard, creative product is again putting the shop on consultants' shortlists. "When they lost all that business, I wondered is this an anomaly or a trend?" said Russel Wohlwerth, principal at Ark Advisors, Playa del Rey, Calif. "I'm happy to see that the quality of work -- especially for BMW and Southwest Airlines -- has picked up considerably."