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January 10, 2005

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U.S. Agency Of The Year: TBWA\Chiat\Day

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January 10, 2005

Hear Final Presentations

By NOREEN O'LEARY PHOTOGRAPH BY MICHAEL GRECCO

Goods Portfolio

Mutual Funds Client Set to TBWA\C\D Expands PackagedC-K Captures Heinz Business

- Accounting - Advertising & Marketing - Bankruptcy/Debt Settlement - Business Insurance - Call Centers - Commercial Real Estate

Late last April, Pat McGauley, senior director of innovation and high-end brands at Anheuser-Busch, asked his troops to come up with a list of their most admired brands, so the brewer could contact the ad agencies behind their work. Apple's iPod and Nissan were big favorites, and TBWA\Chiat\ Day in Playa del Rey, Calif., was invited to present credentials for a possible new-product assignment. Never mind that it had little category experience. The agency, known mostly for its creative prowess, offered more than perfunctory introduction; it blew the A-B group away with ideas for their business. Two days later, McGauley gave the shop assignments for premium brands Michelob and Michelob Light, followed by a test-market launch for Budweiser Select, a project shared with Omnicom Group sibling DDB. "We liked their 'disruption' process and connections planning," McGauley says. "They've got very sound processes in place, and we were impressed at how they took that knowledge into the creative work. They immersed themselves in the beer industry and brought very insightful learning to us, both from an industry and consumer viewpoint."

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People Pat McGauley C.D L.A. Chiat Gerry Graf Chuck McBride

Companies TBWA New York Group Nissan L.A Omnicom Group Nextel Communications

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It's not just the creative firepower that's drawing top marketers to TBWA\C\D L.A. anymore. "We love the fact that clients come to us for our creative work, because it's the more difficult reputation to attain, but they stay with us, and grow with us, because of our strategic thinking," says Robert LaPlae, president of the L.A. office. Last year provided ample proof of just how far TBWA\C\D L.A. has come in delivering on the promise of the merger between TBWA and Chiat/Day, announced 10 years ago this month. Without losing any of its groundbreaking creative pedigree, it has become a champion of the network's disruption strategy and below-the-line marketing-services partner, Tequila. A place once known for its churn-and-burn style of client handling is distinguishing itself now for being handsomely rewarded with organic growth from satisfied clients. In 2004, L.A. was again the powerhouse in TBWA's U.S. network, ringing up two-thirds of the nearly $400 million in new-business wins. Largely, that was not the result of expensive, high-profile pitches: Instead, the office has thrived by taking on assignments however small and building on those relationships. Last year alone, L.A. booked almost $175 million through wins such as Pedigree dog food (Masterfoods' largest global brand), Pepsi iTunes and Pepsi One. Masterfoods, which gave L.A. a few brands (including Whiskas) two years ago, has mushroomed to assignments in 70 countries globally, with TBWA\C\D commanding 42 percent of its business. And the client has become a unifying presence even as it transforms TBWA's global network. "We'd love more global clients like that," says TBWA Worldwide vice chairman Tom Carroll, who until September was running approximately $2 billion of billings as president of the Americas. He is now charged more directly with worldwide business development and client relationships. "They're having an incredibly positive, intoxicating effect on the network. I love to see what winning global clients does to our people in Los Angeles and China and London and São Paulo." Masterfoods is also helping to bring together TBWA\C\D's U.S. offices. In San Francisco, North America creative director Chuck McBride has worked on some Masterfoods brands. And last year, New York landed $100 million in billings from the Mars marketer on brands like Skittles, Starburst, AquaDrops and Cookies, which helped elevate its contribution to the network's creative profile. Last year, the agency saw U.S. revenue rise 15 percent, to close to $250 million, while billings climbed nearly 29 percent, to $1.8 billion. It played a major role in bold client initiatives like San Francisco's launch of

"Impossible is nothing" for Adidas and New York's continuing Nextel rebranding. L.A. helped propel the digital-music revolution and creation of the iTunes Music Store for Apple, an account run by James Vincent, as well as the groundbreaking "Fun anyone?" pitch for Sony PlayStation. In a flat year in the auto industry, Nissan, the longtime client in L.A., expanded its successful "Shift" campaign to Japan and saw a combined 24 percent U.S. sales surge for Nissan and Infinti. San Francisco hit its stride with Adidas, producing poignant work with Laila Ali, and with gritty humor for Fox Sports Network. L.A. continued to break through with new musically charged silhouettes for Apple's iPod and product-driven work for PlayStation that didn't dominate the brand's core entertainment identity. New York pulled its weight with Nextel's funky office danceparty routine and with Skittles' nerdy "Eric," who walks around the office, munching away under a blasting rainbow of the colored candies. TBWA\C\D's solid new-business performance (including no account losses), coupled with the outstanding work from all of its U.S. offices, earns it recognition as Adweek's U.S. Agency of the Year for 2004. "It's the first year all three offices have done well, and we're very pleased," TBWA Worldwide CEO Jean-Marie Dru says. "Los Angeles has always been very strong. But in the last three years, we've doubled our revenue in New York—where it's important to be strong, and where we're now making profits, which wasn't the case two to three years ago. In L.A. and S.F. we've had great people, and now with Brett and Gerry"—new TBWA New York Group president Brett Gosper and New York executive creative director Gerry Graf—"we've got 10 world-class people and more than our share of great talent." Adds Lee Clow, worldwide chairman and chief creative officer of TBWA: "We're much more of a network defined by a group of very talented people. It's not like we roll out offices with the same colored carpet." Getting the talent right in New York has been no small challenge, and the office seems to be stabilizing after three years of revolving-door management. Gosper came to the job in September after a short stint as general manager of McCann Erickson in New York, but he is better known as a co-founder of Euro RSCG Wnek Gosper in London. He is already providing clarity in leadership after a year when office president Shona Seifert found herself fighting a federal indictment stemming from her oversight of ONDCP while at Ogilvy & Mather. (She is now on a leave of absence.) While the addition of $150 million in Nextel billings in May 2003 provided an emotional boost, New York still has had a lackluster new-business record in reviews. "Our priority is to increase new-business momentum," Gosper says. "There's a lot of talent here, and in the areas of planning and creative, the processes are very

strong. The agency's brand image with clients and prospects is very strong." Much of that still comes from the halo of L.A., but New York last year proved its worth to Nextel, with its "Done" strategy. And despite its issues, New York didn't lose any business. "We are a challenger brand in a category of megaliths," says Nextel svp of marketing Mark Schweitzer. "We admired the work the agency did on Apple and Nissan when they were challengers. They built consistent campaigns and consistent identies. We were looking for a recurring idea that stood out from the category, and they're giving it to us." (Last month Sprint announced it is acquiring Nextel. "It's too soon to know how the marketing will play out," Schweitzer says.) McBride says Nextel is "giving Gerry and his team a chance to show what they can do, and I think they've developed a nice rhythm. New York has been a missing link for us—we've never had a robust showing—and now that's changing, which we need to be a network." Graf, on the job since January 2004, has unquestioned creative credentials and has brought a quirky new voice and humor to the New York office. He's already demonstrated that the office can produce the kind of attention-grabbing work worthy of its sisters. Defined in the past by its print and outdoor for Absolut, it now boasts talked-about spots like Skittles and Nextel on its reel. Graf now has to prove himself as a manager. "In my previous jobs, I'd spent my time writing," he says. "Now, almost all of my time is spent helping people sell good work, and I take pride in that. There's been lots of turnover here over the years, but I think the reason the work has been getting better is because that's settling down." Says Clow: "We have to get beyond the West Coast as the network's hot spot. Gerry's got it rolling with some very funny, very fresh stuff. One thing that I like about us is we have no set style. I love the variety. We can be humorous, soulful, irreverent." Still, there's no getting beyond the fact that L.A. was again the hot spot in 2004. It has proved to be a potent new-business force: Among other account wins last year were Sara Lee's Ball Park and Jimmy Dean brands; Infiniti business in Korea; MapQuest; and girls' fashion retailer Limited Too. But with its embrace of disruption, introduced throughout the network five years ago, L.A. is also the realization of the kind of ambitions that Dru and Clow hold for the entire TBWA network. "One of the real milestones at TBWA\C\D has been the hookup as co-chairmen of Jean-Marie, with his very global perspective, and Lee, with his California perspective and his global standards, and their mission of globalization," says Rob Schwartz, executive creative director in L.A. and global creative chief on Nissan.

"When those two got together and looked at the arsenal of tools we had, they said, 'Anyone can do a good ad. We can do much more.' It's 'One team. One dream.' That's why people here in L.A. are cheering on New York." Disruption, conceived by Dru, with its break-the-mold process of exploring marketing opportunities, has always been second nature to Clow, even before it had a name. It's a defining force among the company's far-flung offices, as well as a unifying strategic tool among network clients, drawing in the kind of global companies attracted to its approach. "The agency's disruption process has been particularly effective in helping to develop our strategy on all the brands that TBWA handles, and the resulting work speaks for itself," says Bob Gamgort, president of Masterfoods North America. Other clients view the agency as a broader business partner because of that expansive view toward problem solving. "We use them as more than a marketing partner. We use them as consultants," says Jed Connelly, svp of sales and marketing at Nissan North America. "There are a lot of very smart people there who are good collaborators." TBWA\C\D has conducted 'disruption days' for client organizations like Masterfoods, having done more than 500 by now. But it's not a way of thinking linked to any single category of marketer. "Disruption is a state of mind. It's about walking into the office every day and understanding any client's ambitions," explains Carisa Bianchi, chief strategy officer in L.A. "Jean-Marie's done a great job grounding it, but it is also very flexible. Every office can take the framework and philosophy and tailor it to suit the client. What's the client's business issue? How do we deploy this philosophy against the media toolbox? It allows us to see if an idea has legs. If it's an idea that operates only in TV, it's not a big enough idea." That approach was realized last year through the agency's media-neutral channel-planning efforts like Nissan's "station domination," where TBWA\C\D found innovative ways to use outdoor in Manhattan, taking over Grand Central Station at one point. "It was a great example of a disruptive idea communicated in disruptive media," says Schwartz. While Dru and Clow praise their U.S. managers for delivering the goods in 2004, it's the partnership at the helm of the network that gets credit from Omnicom for guiding that performance and revving up for 2005. "TBWA\C\D's performance has been outstanding," says Omnicom CEO John Wren. "They're really coming together as a team, and the brand is becoming very cohesive under the leadership of Dru and Clow. This year demonstrated just how cohesive, with the newbusiness wins, and they did it without missing a step and continued to produce great creative work."

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