Media Report - Q&A: A Conversation with Roger Schaffner

Veteran studio marketing and media executive Roger Schaffner launched Palisades Media in 1996 after he left Carat predecessor ICG, taking the $80 million Miramax account with him. Two years later, the Santa Monica, Calif., agency was saddled with a reputation as a "movie shop," counting Searchlight, Lion's Gate, Artisan Entertainment and Paramount Classics among its clients and depending on Miramax for about 75 percent of its billings. Schaffner started looking for non-movie accounts, and since then has steadily added other clients, including Virgin Megastores and Virgin Mobile, EA Sports, Behr Paints and, this year, casino chain Park Place Entertainment. But 2003 saw a major loss for the shop: In April, Miramax moved what is now a $180 million account to Zenith Media. Still, Schaffner estimates the shop's billings this year will total $415 million—$300 million of which comes from non-studio business.Losing Miramax was a big blow.That was what gave us the need to build the business side of the agency—that exposure from Miramax, which at one time was 75 percent of our billings and, when it left, was about 30 percent of billings and somewhat less than that in revenue. Obviously, our goal for this next year is to replace Miramax, and in 2003, we have been growing more on the creative agency [partnership] side of the business than getting accounts directly. We won R&R Partners in Las Vegas this year, and we've started working with WongDoody in Los Angeles.Miramax said it wanted to explore branded-entertainment synergies with Zenith's other clients. Branded entertainment was this year's Holy Grail. Is it a real opportunity for you?The problem is, our smaller theatrical clients don't have the scope to offer [tie-in opportunities to] some of those brands. We do one-off deals. We put together our Virgin Mobile client with Artisan Entertainment for Havana Nights, which will be released in February, although that deal is still evolving.At $415 million, you're small compared with the global media agencies. How do you compete? We seem to end up in a lot of reviews with the bigs. We competed against Zenith in Papa Murphy's and when R&R Partners was looking for a media agency partner, and a couple of other times. Initiative was the defending incumbent with R&R. It's hard to say what sets us apart from [the global shops] in one sentence. What we have done opportunistically is, as people become available who are really good, we hire them, whether there's a distinct need at that point or not. We think that if you have the people, you get the business. So over eight years, we have built up very senior groups—a concentration of senior staff on buying teams. Our buyers have an average of 15 years' experience, and 22 years on the account side.So, personal attention from senior execs. Isn't that how every small shop positions itself?The only way we can differentiate ourselves and compete is to have really good people. And we do hear this complaint from clients who have been with the large media groups—that they have been passed off to junior people. In phone conversations, there are clients who say they want to deal with an independent company. These are clients who got caught up in the media-agency consolidation process who say they want to be a big fish in a small pond again. When you grow, I guess that becomes a problem. But when you're midsize, it is easy to have senior management involved with clients. It's a good time to be an independent, because there are so few of us left. Was it tough to get non-entertainment clients to give you a shot? Actually, we were really surprised that people like EA thought, "Hey, we probably act more like a movie account than anything else. We're after a youth audience. We need quick turnaround." That was all the stuff we provided, and so rather than being a hindrance, it worked in our favor. What was your strategy for expanding into other categories?We just kept investing in people who had that experience. We never cold-called. We do not have a new-business division. We would have prospected, and there were times when we said we should put together new-business materials, and just when we would do that, we'd get an RFP, or an article about us would hit and [a prospect] would read it and call and say, "I never heard of you guys." Or "a friend at a cable network said I should talk to you guys." It just kind of built that way.You opened in San Francisco two months ago, your first office outside Los Angeles. What are your expectations for that office? We had the agency relationships, but we have started talking to more tech-oriented clients. We have two people up there, Paula Mangin from Odiorne [Wilde Narraway & Partners, now renamed See] and Robert Boyce, who was the media director at Black Rocket [Euro RSCG], working on Yahoo! I called Boyce just before they lost Yahoo! and asked him to recommend somebody. He said, "What about me?" Those doors are starting to open to us, and we needed somebody to walk their walk and talk their talk. There's no doubt tech is coming back, [but] again, you have to have the people before you get the business. Speaking of which, you added political media expert Jean Brooks from Carat at the beginning of this year.Yes, we've since handled [California gubernatorial candidate] Cruz Bustamante's campaign and a few unions. If you look at our client base, it's still so entertainment driven, [and those clients] tend to be Democratic, and Jean handles Democratic candidates and issues, so it was a perfect match. We would love to handle a presidential candidate.So, you've never been tempted to sell?I'd be lying to you if I said I hadn't had many opportunities. I just think, right now, there's enough unhappiness with the large companies that there is plenty of business for us to survive and grow.

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Media Report - Q&A: A Conversation with Roger Schaffner

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