By Noreen O’Leary Top 10 Events of theYear

What goes up must come down. How painfully true for dot-commers last year as many once-high-flying Web darlings grappled with plummeting stock prices, declining revenue, layoffs and managerial revolving doors. Gone were the heady IPO days of past years. Tech companies going public in 2000 had a mere three months to booze it up before the market went sour in April. Market conditions foiled some companies’ plans to go public—including IPG’s Zentropy Partners. Those that did make it into investors’ portfolios—including Organic in February and Digitas and marchFIRST in March—felt the pinch only too keenly. MarchFIRST, formed last year by the wedding of USWeb/CKS and Whittman-Hart, had its party crashed as the capricious affections of investors in the lagging category (online and off) sent its stock tumbling 98.7 percent by November to just a little over $1 a share. Dazed, the firm announced an ambitious reorganization and sought capital to stay afloat. Even Digitas, one of the category’s healthiest concerns, saw its stock stagger from a 52-week high of $40 to just $6-7 a share. Companies like iXL and Razor fish, which have a longer track record with investors since taking the IPO plunge in 1999, are also taking their lumps. Razorfish, one of the sexier players because of its early profitability, is now struggling with losses, an investor class-action lawsuit and speculation that co-founder Jeff Dachis may lose his top spot.

Go figure. An ad campaign for a new product that threatens to end advertising as we know it triumphed in industry-branding wars last year. Ironic, we know, but that’s TiVo for you—a digital recording advance that shatters time, space and reality in our television universe. TiVolutionaries can thumb their noses at long-held traditions like prime-time, 30-minute programming chunks and, oh yes, advertising. Recording broadcasts on hard drives, they can brazenly pause, rewind and fast-forward at will, personalizing viewing schedules and blocking out ads. On the ad battlefield, TiVo used work from Goodby, Silverstein & Partners to fast-forward past rival ReplayTV. The latter, meanwhile, scampered out of the consumer market, and its ad business (now licensed to cable-system operators, set-top box makers and other TV providers) was yanked from Publicis & Hal Riney and handed to Leagas Delaney.

From the cities to the suburbs, from 6-year-olds to 60-year-olds, one word knew no bounds. Budweiser’s wildly popular “Whassup?” seeped into American culture, forming an indelible connection with consumers. Sure, the line, associated with urban slang, was promoting a beer. But it resonated—without being too obvious or contrived—thanks to its manic celebration of youthful male bonding. Charles Stone III, the video director who made the original two-and-a-half-minute movie, based it on his Philadelphia childhood, where he and his buddies apparently spent a lot of time sitting around, watching TV and regaling one another with “Whassup?” over the phone. And though the particulars may differ, what a universal sentiment it seems to be. The campaign, from DDB in Chicago, swept award ceremonies last year as its war cry echoed worldwide via the Internet. In a category given to cartoonish caricature or a typical booze-and-broads formula, “Whassup?” broke ground—and made Budweiser synonymous with cool. And what Whassupmanship it was: The first quarter after the ads broke was the company’s most successful in a decade, and Anheuser-Busch sales are now at an all-time high.

By some counts, at least 130 Internet concerns have crashed and burned since January, with three-quarters of them being the kind of business-to-consumer sites that dominated Super Bowl advertising last year and helped give ad agencies and media companies a stellar 1999. It’s a new ball game this year, of course, as money and time continue to run out for dot-coms. After securing a dubious legacy by burning through hundreds of millions of marketing dollars in a frenzy in the name of overnight branding, little remains for most of the deceased startups. The category’s most successful marketing creation,’s sock puppet, survives as one of the defunct site’s most valuable assets—or scorned liabilities, if you like to see it as a symbol of wasted cash. In the end, it’s the “old economy” brands, previously the butt of digital-world jokes, that are dominating the Web.

Account consolidations were again all the rage, driven by client mergers and the need for cost reductions. Omnicom triumphed over True North in the race for DaimlerChrysler’s $2 billion business, while General Motors parked its $2.9 billion media planning assignment at GM Planworks, a new Starcom MediaVest unit. Starcom also won Kraft Foods North America’s $800 million media account. Three shops—FCB Worldwide, Ogilvy & Mather and J. Walter Thompson—benefited from Kraft’s creative consolidation, while Uni lever’s $700 million media account went to WPP’s MindShare. Newly merged Exxon Mobil awarded media to Zenith, and Ogilvy & Mather beat entrenched incumbents for Motorola’s consolidated $400 million account. This year promises to begin on a similar note, as shops jockey for huge prizes including Pfizer-Warner Lambert’s $700 million consolidated account.

Agency-client marriages were as rocky as ever in 2000. Many shops witnessed the defections of clients that were long part of their DNA. Deutsch lost its Ikea business, while Young & Rubicam saw Jell-O, KFC and the U.S. Army split. Weiss Stagliano Partners lost its main Guinness brand; Messner Vetere Berger McNamee Schmetterer/Euro RSCG saw Philips Electronics leave as MCI was reviewing a big piece of business; and Lowe & Partners struggled to rationalize its absorption of Ammirati Puris Lintas, losing Burger King and Sun Microsystems. Still, there were monumental wins. In a coup, Fallon won $150 million of Citibank business from Y&R. TBWA\Chiat\Day reeled in Kmart’s $100 million account, while BBDO landed $250 million of business from Cingular Wireless, the company created by the merger of BellSouth and Southwestern Bell’s wireless operations. Cingular’s decision was not without controversy. The client committee and consultants involved in the review awarded the account to Atlanta’s WestWayne, only to be overturned by the company’s CEO. Cingular’s vice president of marketing resigned in protest.

In a year of blockbuster deals, perhaps the biggest surprise was the emergence of Paris-based Publicis as the world’s fifth-largest advertising company. It wasn’t just the breathtaking speed at which Maurice Lévy cut deals—the Publicis chief has pulled off 60 over the past five years, after all. It was the profile and sheer ambition of the acquisitions. Though French advertising companies have a dismal track record in past acquisitions of U.S. companies, Lévy went for broke in 2000, adding companies such as Fallon and Saatchi & Saatchi even while making a surprise appearance in the mix during Young & Rubicam’s on-again, off-again talks with WPP. In May, Y&R eventually went to the London-based holding company, powering WPP to the No. 1 spot worldwide. WPP chief Sir Martin Sorrell emphasized that Y&R’s non-ad agency holdings were as attractive as its media advertising business and geographic scope. Similar thoughts were heard in February from Havas, another French player boosting its U.S. holdings, when it offered a whopping $2.1 billion for Snyder Communications. In a mature advertising market, it’s little wonder holding companies are seeking below-the-line operations with higher margins in faster-growing businesses. In an industry of publicly held concerns, Wall Street has always put pressure on holding companies to continue to show profit growth in a business that by its very design limits growth because of conflict strictures. The year reminded us that in an increasingly polarized industry of very large companies and small boutiques, the middle is no place to be for independents scrambling to keep their consolidating multinational clients happy. Just ask Donny Deutsch, once a fierce independent, now Madison Avenue’s newly minted $200 million man after selling to IPG.

Last year was also the beginning of the end for the old guard as several longtime agency chiefs named successors. IPG leader Phil Geier turned over the reins to McCann WorldGroup head John Dooner. DDB Worldwide chairman Keith Reinhard anointed the company’s CEO, Ken Kaess. Grey Worldwide’s Ed Meyer, shifting his focus to Grey Global, said he would step back from day-to-day operations to make room for his heir apparent, New York president Steve Blamer. For more than 20 years, Geier, Reinhard and Meyer guided their respective companies through international expansion, mergers and acquisitions and diversification into nonmedia marketing. Next up in the executive succession-plan spotlight is BBDO’s Allen Rosenshine, who has yet to go public with his replacement. Meanwhile, some of advertising’s most well-regarded creative practitioners are also looking to the next generation. Goodby, Silverstein & Partners’ Jeff Goodby and Rich Silverstein tapped creative directors Paul Venables and Steve Simpson, while TBWA\Chiat\Day’s Chuck McBride, executive creative director in San Francisco, is set to follow in the footsteps of chief creative officer Lee Clow.

Perhaps the key underlying message of the über-pairing of Time Warner with AOL is that the “new media” business is simply the media business these days. Content continues to be a major factor in media mergers, certainly, but distribution is quickly becoming as important—as seen through the linking of the world’s largest Internet service provider to the country’s fourth-largest cable system. The deal, announced last January, will combine AOL’s marketing expertise and captive base of online users with Time Warner’s advertiser relationships and vast library of films, magazines and music. Though true media convergence is still years away, AOL-Time Warner knows that the race for domination of digital delivery of content is already under way. The year also hosted a flurry of media mergers, as is typical in an industry that has constantly transformed itself in response to technology and changing consumer needs. In March, Chicago Tribune publisher Tribune Co. agreed to buy Times Mirror, parent of the Los Angeles Times. In May, Viacom completed its acquisition of CBS and in June, Vivendi SA said it would purchase Seagram, the owner of Universal’s movie and music studios.

Overall, 2000 was a peak year in ad spending, but a few New Year’s resolutions may still be in order. Extraordinary events like the Olympics, a presidential election and the remnants of millennial hype helped mask growing economic weakness in the retail sector, slumping consumer confidence and the disappearance of an estimated $200 million in dot-com ad spending. As recession fears loom, forecasts for ad revenue growth in 2001 are expected to drop to 4-6 percent, down from 7-10 percent. At year’s end, that sobering outlook may account for the slump in the stock of the industry’s three-biggest players—WPP, Omnicom and IPG—despite a banner earnings year and continued growth and efficiencies from robust industry consolidation.