NEW YORK Today is Peter DeNunzio's first day as president of Draft FCB Group's New York office, replacing the recently departed Steve Centrillo. Formerly the general manager of global clients at OgilvyOne and a 14-year veteran of Ogilvy & Mather in New York, the 47-year-old talked about the challenges facing the marketing communications industry and the players in the ongoing merger.
Adweek: What challenges arise when merging the cultures of an ad agency and a direct-marketing firm? How do you plan to emphasize creativity?
Peter DeNunzio: As long as I've been in the business, I've heard people say that direct marketing is not creative, and advertising is. Regardless of what discipline an agency is working in, creativity is at the forefront of what we do. It can be as much about the thinking and strategic insight and the analytical rigor that we bring to our clients as much as it can be about the creative product that is distributed through the media. I've spent a lot of time with [FCB New York chief creative officer] Chris Becker, for whom I have enormous respect, talking about this issue. We shared each other's reels. We're going to spend a lot of time focusing on how we can keep creativity in the broadest sense of the word at the forefront of everything we do.
Adweek: The New York FCB office was that agency's headquarters, but you come in now leading it as a secondary office to Chicago. Any concerns about managing morale or ego conflicts between the two offices?
DeNunzio: Everybody I've met from both agencies has been genuinely very supportive of and excited about these two agencies coming together and the vision that has been used to describe the agency we want to become. Any new organization is only as good as the sum of its parts. All the heads of the office have to align ourselves with the vision of the global organization.
Adweek: How would you describe your management style?
DeNunzio: I hate to be by myself. So my style is very inclusive in the sense that if I'm thinking through a business problem or we have a client challenge we're trying to address, my tendency is to get a lot of different points of view in a room. To get as many different opinions as possible. I spend a lot of time thinking about how the agency's contribution can be most valued by clients. To do that, we have to get the best thinking and ideas from the agency in front of our clients.
Adweek: What's your impression of Howard Draft?
DeNunzio: I find him to be very entrepreneurial, very charismatic in his own way. He has very strong points of view about the agency world and where it is headed and how he sees the future of marketing communications in a transforming landscape where the customer is in control. What is happening is that all the things Howard has talked about over the years are reality. He's built a very successful organization and is ready to take it into its next life phase.
Adweek: What has president and chief operating officer Laurence Boschetto told you he expects from a New York manager?
DeNunzio: We've talked about how we can most quickly and painlessly bring these organizations together. Laurence is focused on communicating the vision of Draft FCB to the agency's clients, and he's restless about now making it a reality. He's pragmatic about the challenges we face but very enthusiastic about getting on with it and communicating to the agency and our clients what we want to become.
Adweek: Are you being brought in to implement the vision of Howard and Laurence, or do you anticipate having a lot of autonomy?
DeNunzio: This vision has been one that many agencies are talking about, but every agency is going about it in a different way. What Draft FCB is doing in terms of organizing itself to be truly media agnostic or discipline neutral in removing all the structural barriers that have made integration difficult is very progressive. I don't ascribe to the vision of any one person, but what they're asking is for management to join them in creating something that has never been done before. That's what I feel I signed up to do.
Adweek: How do you plan to increase revenue at the New York office? Can we expect layoffs?
DeNunzio: Our clients are going to buy into the proposition of the agency, not one individual office. What will become obvious very quickly is that this new agency is going to become very attractive to clients and prospects. The eyes of the industry are on Draft FCB right now. Once we start to gel and make our value proposition clear to clients, growth will follow, and the best people in the industry will want to work at that organization. That's what I want Draft FCB to become, a place where the best people in the industry want to work. That's the mandate, or mission of Draft FCB New York.
Adweek: What is the biggest challenge facing direct marketing in today's media landscape?
DeNunzio: What's increasingly happening is that the importance of, respect for and the use of direct marketing is now much more at the forefront of a marketing program than it ever has been. By direct marketing I'm including digital and targeted marketing. ... One is the great assets of direct marketing has always been its measurability. The ability to use data generated by marketing programs to make decisions about the most effective and efficient way to spend clients' dollars. There's a challenge now that says we cannot lose that discipline. The results orientation, the generation of data, the analysis of data to determine how effective a marketing program and expenditure is. It's easy for clients and agencies, as we're moving quickly and as we evolve our programs in real time, to lose sight of the importance of the analytical rigor that's always been part of direct marketing.
Adweek: What are some of the challenges in evolving an existing communications company like Ogilvy & Mather when it integrated an OgilvyOne and now Draft FCB?
DeNunzio: Bringing together people who have complementary skill sets and trying to keep everyone's orientation focused on doing the smart and right thing for our clients regardless of which discipline we happen to be working in. The problem that our predecessor agencies have experienced in trying to think through integration is that people always fell back into their comfort zone. If your comfort zone was advertising, then you saw the client's problem as an advertising problem. If your comfort zone was direct marketing, or digital marketing or public relations, then that tended to be how you saw the client's business problem. What we have an opportunity to do now is to think through the insight that we have into a client's business problem and work as one team in determining the most effective and efficient solution. The challenge is more one of how we work together than it is structural or organizational. [Draft FCB has removed] the structural, organizational and financial barriers that have been impediments to integration for agencies in the past.
Adweek: How will running Draft FCB New York be similar or different from running OgilvyOne New York? Do you anticipate any culture gaps?
DeNunzio: I don't make the comparison with Draft FCB to Ogilvy. My own thinking right now is focused on what do we want this agency to be? We can create something from two very strong entities that have come together, something that has never existed before. [The challenge is] to figure out what clients want from agencies in this day and age with the reality of the marketing world being what it is. How can we create that in a way that we can lead the industry? Ogilvy has done an extraordinarily effective job in this area. My frame of reference is not versus Ogilvy, it's versus what I think we want to be at Draft FCB and what the people here think it can become. Suddenly, this agency opportunity has been created within Interpublic. I find that reality to be very exciting. So many agencies are talking about it and here you have these two successful agencies that are actually doing it.
Adweek: Are there any client businesses that are more inherently suited to direct marketing than others?
DeNunzio: One of the things that's happening right now is that a lot of marketers who have not traditionally considered target marketing as distinct from mass media are suddenly realizing that the efficiencies that can be generated by more targeted marketing deserve a second look. So I wouldn't rule out any kinds of categories that wouldn't benefit from targeted marketing. The whole world of technology has recognized that the target audience for a serious significant investment of corporate dollars [is] a relatively small group of chief information officers and chief technology officers at corporations and institutions and government. In the case of IBM, for example, we have come to see that identifying a narrower universe of prospects and current customers within that base has been proven to be very effective in generating a response.
Adweek: Is the line between branding and direct marketing becoming more blurred as media becomes more digital?
DeNunzio: The objectives of branding and direct response and targeted marketing are complementary rather than duplicative. What makes this Draft FCB combination so right for the times is an ability not necessarily to blur the disciplines but to bring forward recommendations that extract the uses of both. One of the things we've talked a lot about in the industry is, should we combine advertising and direct marketing to create one homogenous offering? What agency leaders have to do is recognize that our clients want the agency to be the force that brings the disciplines together around a holistic solution. If a marketer comes to an agency and says, "I'm losing market share to my biggest competitor," or "I can't make any money in a commoditized business," or "My distributors and business partners are unhappy with the way we're spending our money." It's incumbent upon us to figure out the best solution across disciplines, whether it's a direct marketing solution or an advertising solution. When IBM came to [Ogilvy] in 1994, they had a branding problem. Nobody wanted to do business with IBM in 1994 for issues in their business performance and the ways in which they engaged with customers and their price-value equations. Now, more and more clients are realizing that they have to lay out a business challenge to agencies, and the best agencies are the ones that come forward with a solution that could start with advertising, but maybe it won't because the choices are so much greater.
Adweek: How is that different from the challenges five years ago?
DeNunzio: The importance and the use of direct marketing is now much more at the forefront of a marketing program than it ever has been. By direct marketing, I'm including digital and targeted marketing. One of the things that the industry has always stood for is measurability. If you talk to career direct marketers, their biggest fear is that as direct marketing has become more pervasive and more frequently deployed by big marketers, there's a risk that the science and the analytical rigor could be diminished because either we're moving too quickly or there's the tendency to change programs faster than the marketplace requires.
Adweek: Of all the types of direct marketing (direct TV, e-mail, direct mail, catalogue, retail, Internet, search) which is becoming the most effective at reaching consumer targets?
DeNunzio: That answer varies widely depending on what kind of problem a client has. There isn't any one discipline or one tactic or media vehicle that is more effective and efficient in general across the spectrum. What agencies have to do is to analyze a much bigger array of options that we now have to recommend to our clients. We have to bring forward our informed point of view about which vehicle is more effective than another one. That's what clients are challenging agencies to do. What a good agency person can recommend to a client is based on a much wider variety of options than every before. Suddenly you have a much bigger tool kit. E-mail does certain things very well. There's still a huge role for traditional direct mail, which gets an immediate response. I'm a big believer in the principles of customer relationship management because I still think that the notion of segmentation and identifying who are your most valuable customers and building programs that reward them over time is still important.
Adweek: How are you handling clients ever-growing requests for more marketing programs for cellphone users?
DeNunzio: Mobile marketing is just one of the areas that are piquing clients' interest right now. We haven't focused specifically on mobile marketing. We've tried to stay current with the opportunities that mobile marketing creates for our clients. But it's one of many "emerged" technologies that we've looked at.
Adweek: What did you learn about international marketing and cross-cultural communications while serving as managing director of Ogilvy in Paris?
DeNunzio: The ability of marketers to understand the core truths of a brand in a variety of different geographies around the world is a very significant strategic advantage for those who do it very well. What the best global agencies have figured out how to do is to recognize where there are universal truths of the brand, as was the case with IBM, and where there are significant regional and geographic differences and how to handle them from a marketing perspective. Wtih IBM, the inherent truth and emotional values the brand stood for were very universal regardless of geography: Trust, leadership, vision, the informative potential of technology for business success. One of the first things we did for IBM in 1994 was a global brand audit. The audit told us that this brand stands for remarkable consistency regardless of which geography we were talking about. We faced a variety of challenges in Europe when we launched the "eBusiness" campaign because in 1998-1999, the Internet [in terms of global business] was not universal around the world. It was seen as an American phenomenon. A passing fad, if you will. When Ogilvy launched "eBusiness" for IBM, I was in Europe at the time, and a number of people were very skeptical that this was the right way the organization should go. As soon as we made this promise to the marketplace, it had a galvanizing effect both internally and among our competition. We rolled it out to every country and region.
Adweek: How effective are blogs in reaching consumer targets? Do you consider them useful or a necessary evil?
DeNunzio: One of the things that the political world has taught us is that blogs can be incredibly effective. I think there is a fundamental communications truism: people like to be part of communities of shared interests. That's what blogs have allowed us to do. That's one of many new opportunities that have been created in the world of new technologies.
Adweek: Can you describe some of the creative work OgilvyOne has done for clients like American Express, IBM and Morgan Stanley?
DeNunzio: Ogilvy's creative product kind of speaks for itself. One of the things that Ogilvy has done extraordinarily well is to grow business for current clients. That's reflected in the accounts you just mentioned. Launching "Open" for the small business network for American Express was a significant success.
Adweek: How much potential is there in the alliances holding companies are forming with social networks online? In particular, IPG's recent stake in Facebook? Is it another fad or is there an effective way to capitalize on these communities?
DeNunzio: I don't know a lot about the Facebook alliance. But what alliances allow holding companies to do is to learn from those organizations that have paved the way for new ways of communicating with people. It's a requirement that we as marketing communications professionals continue to have relationships with people who have figured out how to connect with customers in new and different ways. I'd be remiss if I didn't talk about the influence my 13-year-old daughter has had on me. She doesn't read a newspaper. She doesn't watch television. She derives all of her information and therefore her points of view on things from a variety of places she goes online that I think have made her a target audience that is going to have to be reached in very different ways from what marketers have traditionally used.
Adweek: People say that for people under the age of 20, television is an alternative medium. Do you agree?
DeNunzio: Television will always be a place to go for immediate, broad reach for very newsworthy events. And I don't just mean news like the CBS Evening News. I mean it could be the World Cup. TV ratings for that were up significantly. Eyeballs will be on television sets if there's something that television is broadcasting that's interesting. Part of the problem is that a vast number of people have decided there are other places to go to spend their time when they're looking for interesting things to do.
Adweek: What about all those rumors that Draft FCB is low-balling everyone to get new business. Is there any truth to that?
DeNunzio: I am unaware of those rumors.
A shorter version of this interview appeared in Adweek's print edition on Sept. 11, 2006.