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BETTY LIU: All right.
Thank you very much.
I'm Betty Liu, I'm anchor of In The Loop, which airs from
8:00 to 10:00 AM on Bloomberg Television.
And among some of the things that we cover, we obviously
cover the markets and also the banking industry, I often
don't get a chance to cover the advertising industry,
which I think is so important and so relevant to what we
have been talking about, particularly with how to get
consumers back into the markets, how to get them
spending, and how does it change with a new technology
like the iPad?
And so I am really happy to be here on this panel
because some of--
all of you, in fact--
have been, in many ways, changing industry
through your careers.
What I'd like to do is just introduce and give a short bio
of each of our panelists, and I'll do that starting,
obviously, from my left but that's your right,
here, facing me.
First of all is Andrew Benett.
He's the global CEO--
and also the chief strategy officer of Havas Worldwide--
but the global CEO of Arnold Worldwide.
And he represents some of the most renowned brands that you
know, Hershey, McDonald's--
some of you might know about the viral hit that Arnold had
developed with it's Filet-O-Fish product, the
jingle that kind of went viral on YouTube--
Ocean Spray, Volvo.
Arnold is a company that employs 1,200
employees in 15 offices.
And Andrew, himself, has received some of the most
esteemed awards in this industry including Boston
Business Journal's 40 Under 40 and Crain's New York Business
40 Under 40.
So certainly, somebody who knows quite a bit about what
is going on in this industry.
Next to him is Marita Scarfi, who is the CEO of Organic,
which is a pure digital shop.
And that's a topic that I really do want to get into in
this panel.
A very interesting career path.
I know you started off at Cooper Lybrand as an auditor
and then you went to the West coast.
And I don't want to oversimplify your
distinguished career but you went over into start ups on
the West coast, and then joined Organic as a
controller, and then made her way up to become the CEO.
A key player in taking it public and then private again
to Seneca, and then selling it to Omnicom.
Some of the big clients for Organic include P&G,
Kimberly-Clark, as well as Intel and Bank of America.
Next to her is Susan Giannino, who is the chairman and CEO of
Publicis Worldwide.
I know Susan has joined Publicis back in 2003.
She led the US operations to a tripling of revenue over the
last three years.
Again, a recipient of many awards
including the most recent--
one of my favorite awards-- which is a Matrix Women in
Communications award a few years ago.
And, very interesting, you served as a nonpartisan
advisor to the George H. W. Bush's Task Force on
Terrorism--
SUSAN GIANNINO: The key word is nonpartisan.
BETTY LIU: --which I'd be curious later on to ask you
how that has to do with advertising.
But, in any case, some of the major clients--
you all know Publicis, they're a huge holding company--
but some of the big clients Coca-Cola, P&G, Nestle,
L'Oreal, and Citigroup.
And Bob Jeffrey, very well known in this industry.
The chairman and CEO of JWT, perhaps one of the best known
agencies in this world, over 150 years old, or about a
150-year-old agency.
And Bob is responsible for over 200
offices, 10,000 employees.
Some of the biggest clients, Microsoft, HSBC, Ford, Nokia.
And I know Bob, from watching television, is often quoted on
various networks and talks quite a bit about the
advertising industry.
I think some have called you the ambassador of the
advertising industry.
And Don Coleman is the CEO of GlobalHue, which is the
country's largest
multicultural advertising agency.
AdWeek named it the multicultural
agency of the decade.
And some of your key clients include Verizon, Walmart, and
also Chrysler.
I know there are some interesting things going on
the advertising front with Chrysler.
So great to have all of you on here.
I didn't mean to take that much time but all you have
very formidable bios, so I was trying to condense them all
into a few minutes.
OK.
So first off, what I want to get into is--
the topic of this was very, very big in terms of the
future of advertising.
But really, what is advertising?
It's basically trying to sell to the consumer.
That's getting harder as you're getting
more and more channels.
So how do you these days sell the most
effective way to the consumer?
And maybe I just have you all answer that.
ANDREW BENETT: I think, first and foremost, it starts with
understanding the consumer.
And I think there's been tremendous developments in the
last five years in terms of really understanding not just
what the consumer wants and how they interact with brands
but how they interact with one another, how they interact
with the media.
And I think if you look at some of the best marketing,
whether it's advertising or promotion or any type of
marketing, you can see how there's that linkage.
And I think the second component to really being able
to deliver this is to be able to understand--
we used to talk a lot about integration as an industry,
and I don't think that integration is really anything
that we've cracked even today.
I think that the key component is understanding of each touch
point talks to each touch point, what the role is, if
I'm doing something online how that connects
to something offline.
So I think the kind of ability to really understand both and
to create both is what helps drive that.
MARITA SCARFI: So for us, I think, we look at, to your
point, understanding the consumer through data.
So consumer-based data that we can gather through talking to
consumers, which is a big part of what we do.
We understand the business also, as well, because that
all comes into understanding how we're going to actually
promote to that consumer or market to that consumer.
For us, we don't look at the technologies as much, though
those are important.
We really start with the insights that really look at
how this consumer is going to engage, and the
connectiveness, to your point, of the idea.
So it's a lot of the same thing.
It has to really start with the consumer because the
landscape out there changes so rapidly that you can't look at
a consumer at any point in time and then just
say, OK, I'm done.
You have to actually look at that quarterly or very
frequently.
BETTY LIU: Because it changes so quickly.
MARITA SCARFI: It changes so quickly.
And, to the point of the iPad, if you're just developing an
iPad application without understanding the consumer and
the connectiveness to the brand then you could actually
completely miss the market.
BETTY LIU: Hold that thought.
I definitely want to get into the iPad.
Susan?
SUSAN GIANNINO: The word selling is such a loaded word.
I think one of the most fundamental changes in our
business is, of course we're ultimately measured against
the extent to which we drive sales for our clients, but
what we do to help that doesn't feel
like selling anymore.
In fact, if it feels like selling were
probably doing it wrong.
So Procter & Gamble has this wonderful new vision, which is
they're trying to transform their company to say that they
really want everybody in the company, all of their
partners, to think about moving from selling to
consumers to serving people, which when you think about it,
is a really huge shift.
These days, to win people over you need to participate, join
them, and provide them something
useful, and help them.
So yes, of course, I'm not naive, it's all about creating
sales, but what we do to do that doesn't feel like selling
anymore, and it probably shouldn't.
It's more like serving, providing services, inventing
things that are useful.
BOB JEFFREY: It's interesting, something that you said
earlier in the question, I actually think it's not so
much a matter of difficulty.
I would take the point of view that it's actually a great
time for communications because I think the
opportunities, and the opportunity to innovate, have
never been greater.
So I think it's of all in how you look at.
I look at it, more or less, from a positive vantage point
in terms of what's out there.
With all the people we have around the world and all the
different market conditions we have a simple philosophy,
which is we create ideas that people want
to spend time with.
And I think the challenge for everybody, and I agree with
what everybody has said here, but I guess our angle on it
would be that we've moved from a model of people just
passively receiving messages to one where consumers have to
actively engage.
And what I talk about more and more with clients and with our
people is about content creation because if you look
at the multitude of devices out there and the mobility of
devices now because of cloud computing, and what's going on
with consumers' control over what they see, it's about
content creation.
So whether it's a TV ad, or a TV ad that gets purposed on
YouTube, and so on it's about we need to think of ourselves
as creators of content.
We need to think outside of even the traditional
definition of advertising.
BETTY LIU: You mean outside of a 30-second commercial.
BOB JEFFREY: Outside of a 30-second TV spot.
It's not like TV's going away either.
I think TV's still great.
We had a meeting the other day with the CEO of [? iCom ?].
We said, TV viewing is still strong it's just that it's
taking place on multiple devices.
If you look at that Old Spice work, that started as a TV
campaign and then the brilliance of what they did in
terms of responding to Twitter and YouTube and all that.
So I think it's really about content creation.
I see that's the pioneering opportunity for us right now
in the industry.
DON COLEMAN: I don't want to echo many of the things that
have already been said, but at GlobalHue we tend to look at
it a little differently because we believe that our
job is to influence the influencers, particularly when
you're talking about online.
So we really want to focus on those individuals that set the
trends, that develop consideration, and that really
sell our brand, our client's brand, through their own
social networking and the like.
So we really focus on the influence of the influencer in
the marketplace.
And certainly content plays a big roll in that.
Development of content is largely based on that consumer
interaction that we understand that needs to be involved with
certain brands and certain content and not others.
But key for GlobalHue, influence the influencers.
BETTY LIU: OK.
And so what I'm hearing a lot, though, is about the consumers
are smarter, they're obviously smarter, they don't want to
just be sold to.
It's not about placing an ad in the paper anymore, that was
dead years ago.
And it's not about, as Susan was saying, you don't want to
be sold to.
The idea, though, is when I say difficult because it's
fragmented, it's getting more and more fragmented.
So what is most effective to hit the mass audience?
BOB JEFFREY: I think there's one thing that hasn't changed,
and I think the fragmentation really paves the way for this.
It's really about ideas.
And I think that a lot of times we devalued what we did
because we got too caught up in execution in the last
decade or so.
And I think because of the fragmentation, because of all
the different channels, agencies have to get back at
what their core competency is.
And it is about big, bold, brand ideas that can transform
a client's business.
And I think, to me, that's the change that's going on in the
industry, and I think that's why even words like
integration are becoming arcane because that goes
beyond integration.
ANDREW BENETT: I think also it would be remiss if we just
didn't acknowledge the fact that the consumer in virtually
every country around the world-- developed and
developing--
has changed.
We talked a lot about mindful consumption.
We did a global study, 5,000 consumers, 12 markets, 86% of
consumers said they were more proud about saving than they
were about spending.
That's a huge shift.
And obviously that's driven in large part
by the global recession.
You can argue where we are in the recession right now, but I
think the behavior change that we see among consumers in
almost every market around the world has changed how we have
to market to them.
And even the expression, marketing to them, a lot of
companies talk about storytelling, you talk about
engagement, you talk about content, you talk about ways
to build that relationship.
And I think, first and foremost, it takes a
recognition that the consumer doesn't need almost anything
we have to sell.
They may need some fast-moving consumer goods, but besides
that they don't really need what we have.
BETTY LIU: And almost on the flip side of it--
and let's just talk about the elephant in the room, which is
the Apple iPad and the Apple company itself--
some companies may not even need advertising agencies in
order to sell their product.
If you look at Apple they've got the iPad, they've got the
iPhone, the iPod.
Why does Apple need an advertising agency?
They can just advertise themselves on all of their
platforms. Google became this huge multi-billion-dollar
company with ugly advertising, uncreative advertising.
SUSAN GIANNINO: Well, one thing for sure is Apple or
very few people need the advertising agencies that
existed five or 10 years ago.
We're in the midst of a pretty radical
change in the industry.
And one of the things the characterizes this change is
there are all sorts of people who can participate in it who
weren't participating in it before.
I think that's going to be an amazing source of innovation
for our industry.
All of us are doing the same thing.
We're not kind of sitting still, we're all looking at
all the different players coming in from all the
different fronts, and we're looking at them and saying
what can we learn from them?
I don't know about the rest of you, but I'm sure learning
everything I can from Google, from Apple,
from everybody's kind--
BETTY LIU: Well, what are you learning, what specifically?
SUSAN GIANNINO: Well, we're learning all sorts of things
from Google, in particular, especially Google Labs.
We're learning a lot about a different way to approach the
creative process, which I think is
changing radically anyway.
Our creative process for years and years has really been
designed to get the work out, and it's
been very craft oriented.
The way Google approaches things, to the extreme, is
about innovation and inventing new ways of doing things.
I think we could all learn a lot from that.
I want to learn a lot from that because I think what
defines ideas these days look more like inventions as
opposed to the ideas of the past. So we
learn that from Google.
From some of the other companies we're learning a lot
about the role that when you marry and commingle technology
with a creative idea you can come up with something
entirely fresh and new.
Again, more like an invention, which I
think is very exciting.
So we're learning a lot about the role of technology and how
that can enable creativity.
I think that's exciting.
How the media owners are coming in to this space I
think is very interesting as well.
I think they're packaging properties, and ideas to them
are properties and platforms. We're learning from that.
So I think it's going to be part of the metamorphosis of
our industry.
So we are open up to it.
So yeah, they don't need the advertising agency of five
years ago, but I think more and more we're learning, we're
incorporating skills.
We're a really fast adapting industry.
And I think some of us are not going to survive, and some are
going to survive and thrive.
And a lot will depend upon your ability to be open, and
learn, and be inclusive.
DON COLEMAN: I think the old model is broken.
I don't think--
BETTY LIU: Which model?
DON COLEMAN: The advertising agency model.
BETTY LIU: The old advertising agency model.
DON COLEMAN: I don't think we're
really advertising agencies.
I think we're as much marketers, creative marketers,
as we are creative advertisers.
So all of our clients are pushing us to help them grow
market share, help them grow their business.
So we have to focus on programs from TV all the way
down to the experiential to try to move metal, move
retail, move whatever product and branding we're selling.
So we have to do that in very creative ways.
Obviously, we have to understand our consumers and
understand their interaction with content, with digital.
But at the end of the day we're all being judged or
graded on how we've grown that client's business because, not
that creative awards aren't great for creativity itself,
but in these days and times I think the client is really
looking at us to be a marketing partner to drive
their business.
MARITA SCARFI: I was going to say, for me, digital is
ubiquitous right now.
Everything is digital, so to say something is digital is
kind of like saying it's everywhere, in my mind.
BETTY LIU: Because if you're not in digital then
haven't caught up.
MARITA SCARFI: Well, I mean at home is digital, everything is
digital, so wherever you look it's digital.
TV went digital, when, February or whatever?
So everything has a digital component
to it in some format.
The great thing about today, getting back to Google, is
that the consumer behavior based data that's out there
that you get through, quote unquote,
"digital," is very powerful.
It helps to drive creativity.
And for me, creativity, when you look at it, is a much
broader term than just creative.
There's design aspects of it, there's user experience
aspects of it, there's technology aspects of it,
there's media aspects of it.
There's going to be shift.
Paid media is going to start to decline.
There's going to be a shift that's going to go into more
us and the creators of content because earned and owned media
are going to have a much larger share of the pie than
they used to have in the past.
So if you really think about the data that you get that is
consumer behavior based data, and you use that as a way to
inform creativity in this broader term, it will actually
help to provide a much more exciting time for us as
agencies, but also as consumers.
Because remember, the consumer now is the center.
It's kind of like the sun, and the content is everything that
we create around it.
So you got to decide how you're going to actually
engage with each of those consumers in a way where you
get the right mindshare.
And that's where I think data is really, really important in
this new world.
BOB JEFFREY: So I think the biggest challenge and
opportunity for us, especially say, an agency that's the size
of JWT, it's all about the talent.
One of my premises is that it's all demographic.
So if you think about the agency that grew up completely
transparent with digital on the web, the sooner those
people take on more and more responsibility within
agencies, and the more courageous agencies are to mix
up the talent and not get into this silo of, oh, here's
creative, here's media--
BETTY LIU: You mean so that it integrates all
throughout the company.
BOB JEFFREY: That it's integrated and you bring in
different kinds of talent.
I think that's a challenge for us, and that's where we have a
responsibility to educate our clients because I think
clients are divided.
Clients still have a strategic side that wants to innovate,
they want to innovate on their side but they have a
procurement side that kind of drives to more traditional,
cost-based efficient solutions.
So I think agencies, again, have to become more courageous
about how they take the lead in putting different kinds of
talent in front of our clients.
ANDREW BENETT: To the talent point, too, I think the best
agencies going forward will hire people who have collected
different experiences.
We look to hire hybrid people, people that have worked in
promotion agencies, in all forms of marketing agencies,
in advertising agencies.
And I think the days of people living on our end in a silo
are long gone.
But we, as an industry, haven't embraced that from a
talent perspective.
Promotion people generally work in promotion agencies,
advertising people generally work in advertising agencies.
And so, we've set the mandate that anyone with over a
certain years of experience has to have collected
different experiences because it's so interwoven today.
BETTY LIU: But do you have a hard time finding that?
ANDREW BENETT: Some people would say that there's in
excess of talent today because of everything that's happening
in the job market.
I think there's actually the opposite.
I think even with the excess of people that are out there
it's very hard, and it's hard in specific areas.
It's obviously hard in the digital world, any kind of
digital hiring whether it's digital
planning, digital strategy.
Strategic planning has always been very difficult for the
last few years.
So, yeah, it's hard.
I think the hardest bit is finding people that are truly
impact players who have worked in different types of
experiences and can bring that and put it all together.
BETTY LIU: But do you also find that it's hard?
And I'm speaking more to the bigger, established agencies
like JWT, like yours, as well as Publicis, which is that you
might have that talent but it's hard to retain them
because they're moving on to younger, some would say
fresher, younger start ups or smaller shops.
SUSAN GIANNINO: Talent is always a huge issue because
our business is so dependent upon having talented people.
I mean, that's really what it is.
I don't think we're having all that much trouble recruiting
great talent and retaining great talent because we're
looking more broadly.
Everybody is, everybody's looking not just in the
industry, not just the same old places.
And one of my biggest fears related to talent and related
to the industry is to lock in too soon to the kind of talent
we're looking for or the kind of company we want to be.
In this time of unbelievable change I think we all have to
work very hard to resist the temptation to redefine
ourselves and get on a path too fast.
I don't know how many of you have know someone who's a
freshman in college, that time period in your
life that's so amazing.
And you go in from your high school where you were so sure
about everything, belonged to every community, and then you
walk into college environment and you don't know anybody,
and you're not part of anything.
And everybody puts pressure on you to sort it out, lock in,
get on a path at the time where you should be most open
and most experimenting.
Our industry's a little bit like being
a freshman in college.
Everybody's pressuring us to, are you digital or not?
Are you design focused?
Are you this, are you that?
What kind of talent are you going to get?
The most important thing we should do at this point is be
open and learn, and experiment, and explore.
That's what we should be doing, is learn as much as we
possibly can and resist the temptation from the clients,
from the new business, consultants who are
trying to define us.
Resist the temptation to define ourselves too narrowly.
We should be open, which isn't to say be so amorphous that
we're nobody.
But I think that's our biggest issue, is don't lock in, don't
allow people to pressure us to define ourselves in a very
narrow way.
ANDREW BENETT: I think we do a horrible job as an industry
with talent development and with career pathing.
On average, the advertising industry, the marketing
communications industry, most firms will spend under 1% of
their profit on talent development.
BETTY LIU: Under 1%.
ANDREW BENETT: Under one percentage point.
If you look at our clients, all of our clients are Fortune
50, Fortune 100 companies, they spend five times that.
You look at models like management consulting where
people come in the door, there's a very solid career
path, there are programs in place.
I'm sure every one of us has put the first name of our
company and put university at the end of it.
We've all got those programs, and they're great.
But they're nowhere near the investment that we need as an
industry to really have people want to be a part of this next
generation.
BETTY LIU: Would you all agree with that, that this industry
does a terrible job?
BOB JEFFREY: Yeah, I think that's a good point.
We spend a lot of time on recruitment and not enough
time on training and development.
But I think it's also a challenge now because if you
look at the younger generation coming in, what all the
research indicates is that they're not into the same kind
of job career path that a lot of us have. They want more
change, they want to move around more.
I saw some research that was fascinating.
As plugged in as they are to technology they don't want to
be addicted with the 24/7 BlackBerry around their neck
in terms of being on all the time.
So that's going to force us to work differently.
All the points you made I agree.
I think we have to have more open model.
I think we have to be willing to have different arrangements
with different types of people based on
what skills they bring.
If I look at a lot of the business that we've won in the
last four or five years, especially in the technology
area, it's because we've become much more flexible
about the type of talent we bring in, the conditions we
bring them in on.
Are they project-based, are they staff-based?
It's harder to do that in a big company, especially when
you're part of a public holding company, but we have
to do more of that.
DON COLEMAN: I think the environment within the agency,
particularly for younger talent, is very important,
where they feel like it's not so what they may have heard
about advertising agencies, maybe a little stiff, maybe a
little too structured.
There's got to be a senior core of people that really
know the business, and then you bring in people from
wherever who you feel have just talent, period, just are
good, creative people, good thinkers,
and you nurture that.
And you form that thinking, maybe it's kind of an unaware
thinking, but your senior people have to take that
unbridled thinking and kind of make it work into a strategic
direction that works for our clients.
BOB JEFFREY: I think that's a really great point.
One question, though, that always goes through my mind.
I'm just curious.
Mad Men, right?
BETTY LIU: I was going to mention that.
BOB JEFFREY: I just came back from Asia, and It's amazing
how many people watch that show.
My own theory is that's been a positive recruitment thing for
our industry because it shows that, even though it's
advertising in the '60s, it shows people having fun,
there's a certain sexiness, a certain glamour.
And I always say, we have to get back to the entertainment
side of what we do.
And I'm part of a big holding company.
I think the holding companies, in some ways, have had a
negative impact on the agencies because there's been
so much pressure on financial delivery that we forget who we
are in terms of the creative side of it.
And I think Mad Men is actually a
good reminder of that.
ANDREW BENETT: You mean we're allowed to
have fun in this building?
DON COLEMAN: Those were before the days of *** harassment.
SUSAN GIANNINO: Clients have always looked to our business,
they still today look to us and our people as a fresh
perspective whether it was all of what Mad Men brought.
Our industry, part of what I love about it, is it is still
more fluid, it's looser, it's a little bit more informal.
And in the end, it is about creativity, and ideas, and
imagination.
We all work with clients, and you put yourself in their
shoes the clients are going through, this is an incredible
time for them.
The pressures.
Just in the last week I've been in three meetings with
CMOs of big companies talking about what we have to do
together, needing these transformational ideas that
are going to help them get into and benefit from whatever
recovery there is out there.
And we are an opportunity for some fresh thinking, some
fresh air, some perspective.
And I think we still do play that--
And we're also more resilient and optimistic
than a lot of clients.
We're hopelessly optimistic I think sometimes, but it's very
important to bring that.
I agree that we can play an important role giving clients
confidence, optimism, and a fresh perspective, and some
moments of humor, I guess.
MARITA SCARFI: I would just say, to that point, to all of
the bigger agencies, I think the ideation process needs to
open up because for the longest time there's this kind
of lead agency model that's been out there, and ideas come
from a lot of places.
You bring the young talent, and I love your
comment around that.
I love the young talent.
I live in Silicon Valley and I meet with
young start up companies.
I met with this group of kids who just graduated from
Stanford in June, and they just bring a fresh new set of
thinking to the table that you sometimes, you just lose.
But as you grow up in your career what you gain is the
experience of how to kind of put those ideas and package
those, and bring them to the client in the right way.
That, along with the fact that you have to have more than one
agency in the room.
And I don't really care.
It's the best idea wins no matter what agency it comes
from and no matter what client it comes from, in that sense.
And so there's this sense of collaboration, and this gets
into integration, that there's this fear still out there
around the fear that if an agency comes up with an idea
that they become the lead agency.
I'd like to see a spirit of partnership much more than
there has been in the past.
ANDREW BENETT: One point, back to creativity.
I think it's interesting we're almost come full circle from
40, 50 years ago where advertising agencies had test
kitchens in the agency so that they could understand the
product better so that they formulate claims for clients
so that they could help to really
partner to sell the product.
You talked about the disintegration of the
business, what's happening with media companies, we're
putting it all back together again today.
So I think it's interesting that we've come full circle.
I think, to creativity, what clients will always need, and
we talk about being their creative business partner, is
they will always need that form of creativity from an
agency whatever discipline the agency delivers and in
whatever relationship they deliver.
And I agree, I think that the smarter agencies are realizing
that in the end, if the client wins we all win.
And it doesn't matter whether the media agency wrote tagline
as long as we can all work together and get the sales or
whatever our metrics are to where they need to be.
BETTY LIU: To get that deal.
Right.
SUSAN GIANNINO: You know, it isn't just about integrated.
I agree with all of your points, the silos have to come
down and the duplication has to go, but I don't think I've
ever collaborated with so many competitors.
The other interesting thing is it's not just across
disciplines.
We're more and more, in the interest of the client, having
to team up with people that are fierce
competitors of ours.
And that, I think, is a fundamental change in our
industry, and it's just going to continue that more and more
we have to get those kind of competitive feelings and put
them aside and start working with each
other again with clients.
Open system is the new way of working, really.
MARITA SCARFI: So that's the difference between, I think,
growing up digital and growing up traditional, a little bit,
is that digital our best friends are competitors.
We go to the same parties, we probably have spouses that are
working for them.
But the point is is that in some ways we help each other
out but we still compete.
And it's a completely different sense of
competition in a way.
That's the part that I like about the digital industry
that I'd like to see more pervasive throughout the
entire marketing landscape.
BETTY LIU: I want to get back, though, to the Mad Men
reference because--
in every way.
Not just the idea of it being almost this attractive
recruitment vehicle for bringing talent into the
industry, but there's that whole era of the lone,
creative genius at an advertising agency.
That the lone wolf there, the irascible kind of guy that
would just create.
And I wonder if that era is over with?
There aren't people like anymore.
BOB JEFFREY: I think it's complicated.
I think what's interesting, all of us here probably do a
lot of new business, right?
No matter how big your agency is, no matter how small, when
you're trying to pitch a piece of business clients buy into
teams, and within those teams they buy into leadership.
And even if you have business for a long
time that's they want.
So I think there's still a phenomenon, and I think it's
part of human nature, that clients
gravitate towards leaders.
Now I think what's different, to me the big change-- going
back to what you were talking about-- is I think those
leaders don't necessarily have to come from the conventional
disciplines.
The old model was either a traditional creative leader or
a traditional account leader.
Now you can have a strategic planner lead a piece of
business, you never saw that years ago.
I really believe you can have a digital creative lead, and
I've seen evidence of that even at JWT.
So I think that's the change but, there's still a
psychology of leadership that clients will always be
attracted to because they're looking for that.
They're looking for somebody come in and tell
them what to do.
They want that kind of outside advice.
There's no way you're going to do that in a very homogenized
kind of communistic team-like approach.
I'm not saying it's communistic but you know what
I mean, in that sense.
DON COLEMAN: I agree with that.
I think internally you need leadership as well.
I'm a big believer in teamwork, no doubt, but
everyone looks to a leader.
I was told many years ago that there are more sheep than
shepherds, and people will follow a strong leader.
And that's internally as well on the client side.
There's a relationship that has to be built up, and a
confidence that has been built up from a client
to an agency lead.
And it doesn't have to be an individual.
It doesn't have to be me, it doesn't have to be you.
There are a number of people who could take that leadership
mantra, but it is still very necessary.
There are no lone wolves either.
I think a good leader brings
collaboration amongst the team.
ANDREW BENETT: I think cultural alignment, too, is
more and more important today between a client organization
and a marketing communications company's organization.
And it's finding that matching DNA.
If I look at our most successful partnerships, we're
an extremely entrepreneurial company, they're an extremely
entrepreneurial company, we like to do things quickly,
they like to do things quickly.
And if I look at some of our relationships that are
longstanding relationships, or even shorter ones that aren't
as healthy, there isn't that match in the DNA.
So I think that kind of synergy will become more and
more important because clients can go anywhere
any time for an idea.
SUSAN GIANNINO: I think innovation is really benefited
by diversity of input.
And I think more and more every single idea that we
create has to live up to a higher standard of innovation.
BETTY LIU: Doesn't that, at some point,
slow things down too?
SUSAN GIANNINO: It can slow things down, absolutely.
So a lot more time has to be spent saying, OK, in this team
you own this, you own that.
And if you don't spend time doing that people duplicate,
they argue about process and direction as opposed to be
goal directed.
But if you can get beyond that, absolutely, I believe
innovation--
I think we need to be more innovative today than we did
in the-- or they did-- in the Mad Men days.
We had captive audiences then.
And basically you had a message, and you were the
first doing so many things.
Today we have to put a lot more energy into being
innovation, and the standard has been raised.
And I absolutely, I see it every day.
You bring a diverse group of people into a session, you are
clear about the goal and what needs to be accomplished,
which isn't always the case--
too many sessions are spent arguing over process as
opposed to focusing people on the goal--
but you focus them on a goal or a vision and you let them
loose, absolutely, innovation is benefited by
diversity of input.
Absolutely.
MARITA SCARFI: And I was going to say, one of the things--
a little bit tangential to what you were saying--
that we're finding more and more is that we are becoming
more change agents for our clients.
They're asking for us to help educate them more around
what's happening in the marketplace, where they can be
outside their industry, where they can go to events.
How we personally, as an agency, help
them as well, too.
And that's a big challenge for us as an agency because we're
not just about doing the work anymore either.
It's not just necessarily about the innovation.
But it's actually helping ourselves as well as help our
clients to tackle what's going on out
there with the consumers.
And that's a big difference.
And how we solve that?
I'd have to say, the consulting industry has done a
much better job of solving this than the agencies.
But it's more and more, more clients are coming to me and
asking me to do this with some of the director- or even
VP-level marketers.
It's a big change.
BETTY LIU: So we have just about--
I'm looking at the clock-- about six
and one half minutes.
I want to continue this but I also want to start getting
questions from the audience.
And so--
Yes?
You, the man in the white shirt I think.
You can stand up.
And I don't know if we have microphones.
Do we have microphones here?
If not, just stand up and speak very loudly, if you may.
AUDIENCE: You guys talked about creativity and working
with competitors.
What about price?
What's the landscape for pricing your products versus
your competitors.
How's that [INAUDIBLE]?
BETTY LIU: Did you all hear that?
ANDREW BENETT: This has been the debate in the industry for
decades now.
And there's been many models that have been floated both on
the client side, whether it's Procter, Coke, a bunch of
different models.
I spent a decade in consulting, and I think
another example of the consulting field getting it
right where you're paid for the deliverable.
We're paid for FTEs.
We're paid for people.
I think that where we need to get to is--
and we have a few relationships like this-- you
give me x dollars and I will deliver abc off of that.
I've not seen any agency who's really cracked the code.
I think we're all playing with it.
And I think the biggest challenge with it--
BETTY LIU: Why is that hard, though, to crack the code?
ANDREW BENETT: I think the biggest challenge is client
organizations, especially in this economy, don't want the
unknown, the variability.
So if you take what a lot of us have, performance-based
compensation, where we take less profit for a higher
return if we meet whatever the agreed upon metrics are,
there's that unknown out there for the client.
There could be a 10 to 15% swing on a $10, $15, $20
million revenue piece of business is something that
hits their bottom line, and that they don't know how to
control for, or don't want to control for.
So I think that's a challenge.
As it relates to inter-agencies and agencies
working together, again, I don't think we've figured out
when someone's the lead agency.
There are a lot of models where we'll be paid to be lead
agency but we may not crack the code.
And that's where, I think, we're still trying to figure
out what the best way is.
BOB JEFFREY: I think one of the biggest challenges we face
is no matter what client you work with there's a very
strong issue of procurement.
And the problem is that you have CMOs on one side who want
the best possible work and want you to innovate, but
procurement doesn't come into them.
They come into the financial side.
So that's where I think-- again, I
use the word courage--
there are certain situations that come up where I think an
agency has to have the courage to say no and push back.
That's number one.
Number two, I think where we need to be more innovative,
and we're not--
and I think this is where we have to have a certain level
of humility-- is we're not really building compensation
models around IP and content.
If you think about where the industry was in the Mad Men
era it was very simple.
It was 15%, 17.65 on production.
We need to get back to a model where
creativity has more value.
We have one client, for example, where we actually
developed a TV property that's been on air.
And I think the learning I got from that is if you want to
get a client to change the way they're going to work with you
on the compensation level you, the agency, have to be willing
to put skin in the game.
And that's not something we've been willing to do.
And that's going to require a certain amount of courage and
experimentation.
BETTY LIU: I see a lot of nodding heads.
ANDREW BENETT: And I think that was my learning, in a
good way, from doing something that was great, but we didn't
really figure out the compensation correctly.
So that was a lesson I got out of that experience.
DON COLEMAN: I think we all put skin in the game because
whatever the prescribed profitability amount is the
client always squeezes you beyond that number.
So, we all have skin in the game at the end of the day.
I think clients, through procurement, do themselves
harm in terms of getting the best ideas because it's hard
for agencies to collaborate with one another to come up
with the best idea when the client is, basically, throwing
a jump ball at you and saying, I'm going to pay for the best
deliverable idea.
And that happens in some cases, so it really pits
talented people against one another to try to get the work
done and get the maximum compensation out of it.
When clients started to price our business like they did
automotive parts it became a very difficult situation.
And I think it's hurt the agency, but it's also hurt the
client as well.
BETTY LIU: I want to get to-- we've
got quite a few questions.
Yes?
AUDIENCE: Could you talk a little bit about relationships
agencies have with advertisers, speaking about
what [INAUDIBLE]
look like?
BETTY LIU: OK.
Let me just repeat that question because I don't know
if the whole audience will be able to hear you.
But you're basically saying, what about the partnership
between the advertising agency and the publisher, right?
ANDREW BENETT: So publisher, any media outlet?
AUDIENCE: Yes.
ANDREW BENETT: I'll give you one example.
We're agency of record for the Atlantic Media Company.
We did that for the creative opportunity but we also did
that to create an interesting partnership model
with a media company.
And so, we're doing everything from hosting high level
dinners with them to conducting proprietary
research to working with them on
building back end solutions.
And we're just kind of playing with that model right now.
And we looked at a bunch of different models.
There are publishing companies that have in-house agencies.
Many of the media properties right now, basically, have
marketing departments that they take to sell their
platforms. I think as agencies what we need to do is find
unique ways that best serve us to be able to then take those
ideas to clients.
BETTY LIU: OK.
I think we have time for one more question.
So, the lady in the green?
AUDIENCE: There's a trend in some agencies [INAUDIBLE]
ownership.
And also [INAUDIBLE].
BETTY LIU: You mean for agencies to develop their own
brand is what you're saying.
OK.
So her question is, there's this trend of agencies
creating their own brands.
And are you asking if that's--
AUDIENCE: And own products
BETTY LIU: And own products.
Is that the trend going?
MARITA SCARFI: Yeah.
I think, honestly, I can see that in some ways.
But I think open source is the better direction to go.
In other words, you create products, you let the consumer
use it, sometimes you do it on behalf of the brands.
And it comes back to you in spades from a client
perspective.
But there are some places that you just find yourself in a
place where you create a product that you might want to
take to market.
Where we come from, going out there creating your own
product and then marketing it is almost like creating a
market that you don't even really know exists.
And I think that goes against innovation experimentation,
personally.
SUSAN GIANNINO: I don't see it as a big trend per se.
I see more what Bob was describing, which is we're
creating more and more, in a way, utilities or tools that
clients can use, useful inventions that we
have a stake in.
And more and more, I think, we're going to see what you
describe, put some skin in the game, and
partner with the clients.
I don't see having your own product.
Our New York office, last year, dabbled in
that a little bit.
And we actually had Publicis beer.
It didn't do very well in the market, I have to say, but it
I thought it was pretty good.
But anyway, I think it was great that we experimented.
I liked doing it because, again, it's part of try new
things, take a look, feel how creating something in a
different arena with a different end goal makes you
think, opens you up creatively.
So I loved doing it and experimenting a little with
it, but I don't see it as a big business opportunity
unless we get really better at it.
ANDREW BENETT: One thing I think you will see is, we have
three clients where we are innovation agency of record.
So we, basically, work with their innovation department to
help them develop products, move it through their stage
gate process.
And our compensation depends on how far it goes through
that process.
It's a small percentage of our revenue.
But the way we see is it is incremental revenue,.
It is interesting, creative news value for the agency.
But the self-serving benefit of it, really, at the end is
when those brands go to market, if and when they go to
market, we become the agency for those brands.
And that's written into the agreement.
So I think it will never dramatically change our
business model but I think it's changing how we engage
with clients.
DON COLEMAN: We're a little different in that we're
developing content programs that we're becoming partners
with our clients on that target large affinity groups.
And if we get those affinity groups to switch, if you will,
to our clients brands then we have some upside as it relates
to that increased sales volume and market share.
And we like that kind of program because it, in some
cases, can be revenue generating beyond the original
compensation agreement with your client.
SUSAN GIANNINO: And this is probably an heretical notion,
but to your question about product
development and invention.
If I had to pick a company that I would like to be more
like in our industry--
and not exactly like but more like-- it wouldn't be a
company in our industry.
It would be more like IDEO, really thinking about using
really incredible behavioral insight married with creative
design sensibility to invent new things.
So the experimentation in new product, I think, is great
because it gets us closer to that because I think we really
do need to become more inventive in
everything that we do.
BETTY LIU: Our time is up, but I could probably go on for
another hour.
This has been very, very interesting.
Thank you so much for the audience for
sticking around with this.
I want to thank Andrew, Marita, Susan, Bob, and Don.
And thank you for sitting with us.
I think we're going to break and change sessions.