It was a meeting of the minds.
We brought together the heads of the largest global agency network in the world, free-spirited leaders from the largest independent agency in the U.S. and top executives from a marketing-services dynasty bent on worldwide expansion to discuss our ever-changing industry.
Would this diverse group find common ground or engage in intense debate?
We weren't sure when we invited the CEOs and senior members of McCann-Erickson, Deutsch and Digitas to join a roundtable discussion at Concept Farm's loft studio in Chelsea.
McCann's John Dooner had never met Donny Deutsch, although the two had competed for
business. Add Digitas CEO David Kenny and president Kathy Biro, Deutsch general manager Linda Sawyer and Jim Heekin, the incoming president and CEO of McCann-Erickson Worldwide, to this eclectic, provocative mix and we were off.
The hour slated for discussion could easily have been extended. Interestingly, Dooner and Deutsch were often like-minded, agreeing on what it takes to be the best and the importance of a strong, agency culture. But our panel fiercely debated the impact of the Internet on the industry and the role of agencies vs. marketing-services companies.
Moderated by Adweek editor Alison Fahey, here's what our Agencies of the Year had to say.
ADWEEK: Let's start by talking about momentum. Two of you--McCann and Deutsch--are repeat winners from last year, and certainly Digitas has had a successful run. We found that interesting because we rarely see such impressive performances back-to-back. More often than not, we see agencies fall apart after a fantastic year. How do you maintain your momentum?
DEUTSCH: I think the most important thing is the accounts you choose not to go after. You have to find accounts that are right for you and resist pitching everything that comes along. It's keeping your eye on the ball on current clients and making sure you're staffing up on the new ones.
ADWEEK: That sounds so simple. Why doesn't everybody do that?
DEUTSCH: I don't know. It's called "the people, stupid." If you're bringing in the right people, you win. If you aren't, you lose. I don't care what the size of the organization is--whether it is a McCann or a Deutsch. With that kind of growth, if you're not expanding your resources with the proper players, it ain't going to happen.
ADWEEK: John, did you do something differently last year to sustain success?
DOONER: We probably focused more on the fundamentals, creating an environment where people can do their best. You have to recognize that there is no finish line. That you have a constant quest to be the best.
ADWEEK: Keeping with the idea of environments, you all have very different ownership structures. McCann is wholly owned. Deutsch is independent, and Digitas is about to go public. How does that affect your daily routine and the agency's culture? Let's start with David. How do you think going public will change your shop?
KENNY: The thing that's going to change for us is that everyone in the company is a shareholder now. Having everybody feel they are owners is going to improve the culture in terms of everyone feeling they have a little more responsibility.
DOONER: I think today the better creative agencies and the strongest-performing agencies are invariably the ones that are the best financially performing companies. There is a huge correlation between quality and a return on that investment.
ADWEEK: We find that many agencies do a poor job of branding themselves, and that many don't stand for much. How do you create a special environment or culture?
DEUTSCH: It's very simple, and it's what I live by. First, you start out looking for a like-type person. We talk about big brain, big heart, thick skin and 2 percent off center, and that tends to be the case if you go across all 700 people. Secondly, I have always believed that if you show people you care about their success as much as your own--not more because then you're an idiot and not less because then you're a jerk--they'll go through fire. That doesn't happen with T-shirts and parties, and you can't fake it. They just know it. That means giving people the opportunity to stretch, to be as good as they can be. That's all people want when they come to work. That's what it's about. That's a special culture thing. I pinch myself every day. I don't know how it happened.
DOONER: It's also about winning, and cultures can help create a winning attitude. People like to be with winners, and winning begets winning. You know, in the old days, it was about making everybody a little bit nervous. The idea was that if they were a little scared, they would do better. That's really not true. That's not a sustained sensitivity. That's a short-term sensitivity. A winning culture is an incredibly infectious place.
DEUTSCH: It's funny you mention winning because there's a saying we have: You have to have a voracious appetite to win. Losing is not acceptable.
ADWEEK: Come on. Who wouldn't say that? Name a place where people show up for work saying, "I'm going to lose a big one today, and hey, that's just fine with me."
DEUTSCH: You're right. Nobody likes
losing, but you'd be amazed at how many companies where it becomes part of the DNA that it's OK to lose. They say, "Oh, well, we gave it our best shot." Wrong. We will start certain pitches saying failure is not an option.
DOONER: I agree. You approach something with a sensitivity that you're not going to be denied. It's different than accepting losing. Not to be denied is a mentality.
ADWEEK: Linda, how would you describe the Deutsch culture?
SAWYER: I think it's lean and mean, and all about being smart and with heart. At the end of the day, what our clients are buying is the whole philosophy and culture--and the by-product is the work that comes out of it. Part of that sensibility is about accountability.
DOONER: We talk about four elements to culture: loving what you do and having a true passion. Only those who love what they do will have the intensity to be the best. We talk about honesty and the idea of creating trust, and we talk about a sense of humor.
ADWEEK: David, what is the Digitas culture about?
KENNY: It's genuine, which is the way we deal with each other and the way we deal with clients. It has to do with trust as well. It's accountability, which I think will be increasingly important. And it's the right mix of insight and intellect. You need both. Looking at the advertising industry, part of the challenge is that there's a big focus on creative awards, on the work versus the result. I believe in the digital age that the sales result, both short-term and long-term, is going to be increasingly important to the way we brand. You're going to be known by your results. And I think those brands, results-based brands, are going to be even stronger in any service business, including this one.
ADWEEK: Do you all feel that you are in the same business? Do you compete with each other?
KENNY: No, not really. There's a convergence. We say you have to play hockey where the puck is. Our business evolved a lot from what was a direct market business to what is an Internet-centric business. Our business is much more of a mix of technology, strategy, marketing and creative--and how those come together.
I think the issue is that communications, even marketing communications, isn't the center at Digitas. The center is business transformation. If you look at the places we have worked, it's been about new-business models. It's about new products. It's been about new channels. It's been about new pricing. Communications is a part of it, but it's not the center of the business. Whereas communications has to be the center of advertising. I respect it as a tool. We don't do it. There are other people
better at advertising than we are. So do I see us going into it? No, it's not really what we are about. It is a marketing tool, for sure, so in the broad marketing world, that's true. And you've got to pick your clients. That's why our roster has been people who are transforming the business, which is the way they are going to manage the customers.
ADWEEK: So, what are you calling yourself if not an "agency"?
KENNY: Clients generally refer to us as a marketing company or the marketing partner. Some call us the marketing agency. They will typically say we have an advertising agency and a marketing agency.
DEUTSCH: John, we're not going to let him get away with this, are we? Listen, we are all in the marketing business, we're all marketing partners. [David], you said it yourself, at this point, you are technology-centric. We are all working back from the customer, building brands and getting to them vis-ˆ-vis the various venues. Any guy can give you an argument that the McCanns and the Deutschs are more marketing partners because we've got the coverage. It is not an either/or [issue]. I think we are all in the marketing business, and we all start from that vantage point. Having said that, I will never run away from the word "advertising." We are an advertising agency. I'm proud of it. It pisses me off when we try and reinvent names for ourselves like astronaut marketing consultants.
DOONER: When we formed McCann WorldGroup, the McCann-Erickson Advertising Group stayed the same. We are in seven areas that provide communications tools, but the advertising business is about clients and ads--and primarily about ads.
If you lose sight of that, you really ought to go do something else. Where we do compete with [Digitas] is in other marketing-services areas.
ADWEEK: Back to Donny's point about agencies renaming and reinventing themselves. Why do you think agencies make apologies for themselves?
DOONER: Sometimes people get so introspective they create this fantasy in order to try to create some relationship or interest. And that's understandable. But when it violates the basic principles of your core confidence, it's bullshit.
DEUTSCH: It happened for two reasons. One, people started to see it in dollars and cents. The McKinseys were all walking in charging $20 million and walking away with a deck that says nothing. And they were sensitive to where the action is technologically, as opposed to realizing, at the end of the day, we are still the brand stewards. We are going to still be at the epicenter of things. But I think the smart agencies are kind of regaining that and fully understanding it.
ADWEEK: Looking back on 1999, what were the highlights? And is anyone brave enough to identify a memorable mistake?
KENNY: The highlight of the year for me was the day we granted stock in the company to all 1,200 people because they had worked their asses off. Emotionally, it changed the dynamic about how they felt about the place. It was a good investment to make. We see the change. The mistake of the year was going to the name Bronnercom. It lived too much in the Bronner past and didn't establish where we are today. We became a very new thing 18 months ago, and we should have been more bold about that early on. Sometimes you have to create a new brand. We should have had the courage to do that sooner. We should have went to Digitas right away.
ADWEEK: One of your high points, John, had to be regaining Coke business, right?
DOONER: I think we had a lot of high points. We have the world's greatest brands, and that's what makes McCann so strong. But yes, to have Coca-Cola say "Hey, let's play again." Awesome. I mean awesome.
ADWEEK: You don't think you're being masochistic about Coke? If somebody kicked me in the teeth, I don't think I'd turn around so quickly and give them another shot at it.
DOONER: I can respect that. I hate to be ridiculously fundamental but the reality is that Coca-Cola is one of the world's great brands. So is McDonald's, which I got a chance one time to play with as well. I think getting involved trying to help direct or play some role in these brands is very exciting. I think it's why you're in the business.
ADWEEK: It probably goes a long way toward healing a bruised ego, too.
DOONER: I don't know. You can't be driven by that, be-cause ego is going to kill you.
ADWEEK: Any other memorable highs or lows?
DOONER: You know, McCann USA, I think, won 11 out of 12 pitches of new business this year. That's awesome. Do you know the exception?
ADWEEK: Yes. Zyrtec--and you lost it to Deutsch.
DOONER: Right. Until this moment, when we finally met--and as you can see, I obviously have great respect for what he stands for and what he does--well, I didn't have that before coming here.
ADWEEK: So that loss was a down day?
DOONER: No. I'm talking about an up day. It was coming here and recognizing that somebody else has good character, great product and there was a good reason for the loss.
ADWEEK: You should be a politician, by the way. What about you, Donny? What was your best day?
DEUTSCH: Kicking McCann's ass.
DOONER: Donny, once, only once.
DEUTSCH: Actually, it was twice. There was Microsoft's Expedia.com also, but who cares? It was McCann Seattle, so that doesn't really count.
DOONER: We had to give him something. He's got to grow.
DEUTSCH: Our best day, let me think about it. I think when we won 13 out of 14 pitches.
ADWEEK: 12 out of 13, actually.
DEUTSCH: The most overall satisfaction I've gotten is the involvement with
Mitsubishi. In my career, I have never been involved or seen such an impact that marketing and advertising can have on a business. There's a lot of things. They've got brilliant management and some really terrific product. But to go from being in the toilet to up 37 percent really reinforces your belief in advertising and marketing. Also, what a good client, a good agency and a good product can do. Overall, that's a kind of string throughout the year, a real positive buzz. It's interesting that whenever you meet very successful people, you tend to focus on the one negative: The one pitch we didn't win, the one that got away. I am only angry at myself because we shouldn't have pitched Toys R Us, which went to Burnett. It was one of those things where from the beginning, you sense a pitch is not winnable. You knock yourself in the head, well, shame on you. You made a mistake.
ADWEEK: So it was a bad decision to pitch them?
DEUTSCH: It was a horrible decision.
ADWEEK: Why did you do it if you sensed it wasn't the right thing? Greed?
DEUTSCH: No. [We did it] because you think you're going to change the world. You think you can fix the brand. You can talk yourself into it any way you like, but your initial instinct is usually the right one.
ADWEEK: What was one of the toughest things you had to do last year as CEO?
KENNY: We changed a couple of people who were good on some dimensions but not consistent with the culture.
ADWEEK: What do you mean by "change"? Do you mean "fire"?
KENNY: Yes, I mean fire. We had to fire some people with good skills who didn't fit the culture to protect the culture. We had to say good performance, great client relationships, but they are not us. They are going to be poisonous. And that's a very hard thing to do. You take a risk when you do that. But it's paid off. It told people we are serious about our culture.
DEUTSCH: Without being specific, having to let certain people go, that's the hardest thing anybody has to do as a CEO. Beyond that, there's been some hard decisions about which clients to get in bed with. Turning a lot of business away isn't always easy.
DOONER: You know, I can't identify a specific thing. I didn't have a personally tough year. Certainly trying to sustain the kind of performance that we have had in previous years is difficult. But I wouldn't say it was the toughest. It was no individual thing that makes it difficult. And what we're trying to do is create confidence in several areas. Trying to understand those different confidences and then seeking them out. Sometimes, you build those confidences through the acquisition of people. But there is no one individual thing.
ADWEEK: Where do we all stand on the role of the Internet in marketing communications?
BIRO: It's interesting that dot.com companies using general advertising brands are now shifting back to accountable media. We are moving toward more nontraditional media--the Web, direct marketing--because basically, anything you do to brand a dot.com company is direct response. It's directing traffic. And I think one big trend for the industry as the Web emerges with more and more importance is media, accountable media.
DOONER: I understand what you're saying, but I have never seen so much dot.com advertising on television.
BIRO: It's all crap. The industry is basically saying isn't it amazing how the dot.com companies are turning to traditional advertising to build their business. But now they are turning away because--
DOONER: When did they start turning away?
BIRO: They are turning away now. You're going to see a wholesale shift. It is leaving. I think the question is: As the Web becomes more and more important, what is the role of advertising in support of these Web-based companies?
DOONER: This is total nonsense.
BIRO: It's the future.
DOONER: Let's be honest. The Web is vitally important and will grow in its importance. Will it transcend or replace the need for a mix of tools to effect what's coming down?
BIRO: The question is: Is it going to change it and how much?
DOONER: The answer to "Is it going to change it?" is no. Is it going to be a tool within context of what you're trying to achieve? Absolutely. The level at which it is will be dependent on the category--the needs and the desires of what you're trying to achieve.
BIRO: Do you feel the business is the same and will be the same with this thing in the mix?
DOONER: The business is the same. We have another tool to help us affect what we are trying to do.
ADWEEK: Donny, do you think it's more involved than that or is it a tool?
DEUTSCH: Frankly, you never heard me say this. I am going to end up somewhere in the middle. I am going to call it: It's a tool squared. This thing is really throwing a wrench in our box. Not to the point, to the magical-carpet ride. But to John's point, consumers are going to still take in a cadre of messages from a cadre of media. This is one with all the juice, if you will. But at the end of the day, my 10-year-old step-daughter, who grew up on computers, is still spending an hour doing that and then going on to watch Nick at Night. I don't see that changing.
KENNY: The issue is to wait until consumers take more
control of brands. The interesting thing to me is to go back to brands before mass advertising, brands before television, brands before radio. You know 200, 300 years ago.
DOONER: Brands didn't exist until 1900. Before that there was box soap. The history of advertising and competitive brands started in the industrial revolution in 1900.
KENNY: There I disagree with you. I think that for advertising to arrogantly own brands is a fallacy. I think brands were religions. I think brands were city states and brands were communities that people chose to be a part of and that had reputations. But if you look at some of the very fast-growing brands, if you look at Yahoo!, if you look at eBay, if you look at AOL, these were brands based on community. The Web does bind people together. I think as you see more community-centric brands, the way you build those is to extend invitations for people to join. It's not as much communication-driven. The problem is people confuse advertising and branding.
DOONER: Listen. The impact of the Internet is global use. There has never been an element, whatever you want to call it, that has been able to be an advertising vehicle, a channel of distribution, a business exchange of information--and a personal communication tool. Never has there been one tool or one vehicle to encompass all those things. That's unbelievably powerful. The idea of building brands through one vehicle really died a few years ago. It used to be a 30-second spot and a print ad--maybe. The use of the Internet and the Web to help brands is going to increase in its importance. But to think that it's going to replace [advertising] or it's going to totally change the whole thing is ludicrous. It will be an important part of the mix of building a relationship between customers and consumer brands, a very important role. And, I believe, its role will continue to grow.
BIRO: The only strange thing is that if that's the position the advertising industry takes, then it would be the only industry that's not fundamentally saying that it is transforming its core dynamics. I mean it's changing brokerage and financial services, every single industry.
DOONER: Let's keep going.
DEUTSCH: Is it changing the movie business?
DOONER: Does it change the soft-drink business? Does it change the soap and detergent business? Come on.
DEUTSCH: Am I going to get hamburgers from McDonald's on the Net?
DOONER: Why do you think that dot.coms, after initially trying to build their brands on the Web, and getting gazillion of dollars, gave them to agencies and said build me a brand as quick as you can?
BIRO: Because there will always be a role for general advertising which builds brands. Consumers need an emotional relationship with brands, and [the Internet] is arguably today the best method of development.
ADWEEK: Do you have a dream client that you covet? A brand you've always wanted work on?
DEUTSCH: What's John's biggest client? Actually, McDonald's would be fun.
ADWEEK: How about you, John?
DOONER: It's interesting, and it's impossible for me to answer. The reason is because of our size and scope. There is no brand that we don't have. I think the answer to your question is--and I think maybe why Donny reached for McDonald's is--the thing that most of us in this industry love is the brands that are most challenged and those that we have the most respect for. We'd love to get our hands on them to see if we can correct their course and bring them to a higher level.
ADWEEK: We're getting down to fewer and fewer players in the business. Is there an end in sight to the consolidations?
HEEKIN: There's a finite amount of companies to buy out there. I think if you're
buying under the premise that the name of the game in our business ultimately is clients, he who has the most clients, most good clients at the end of the day wins. You know, if you're managing one of these great [companies], then what you'd like to do is be healthy and strong and feed the stock. Ultimately, that means you need two or three major networks globally.
ADWEEK: What do you do to make sure you are changing with the business and staying relevant?
DOONER: I think it's appropriate that you constantly look at yourself, whether it's on a yearly basis or every two-year basis, to make sure you are relevant. It's not unlike a brand that we try to form a relationship with. So as a brand or as a service offering, which is what we are, you do the basics and the fundamentals to grow to be the best. At the same time, you constantly look at yourself to make sure that what you're showing, what you're presenting is relevant, which typically means some shifts, some changes. So I think all those things add to the mix, but they are all pretty fundamental. Now, I've got to believe this could be the fun thing--[to select] two major agencies two years in a row. Two major agencies that are very well-exposed and see what happens with these agencies next year.
ADWEEK: We'll be watching.