REBOOT
Wired case studies in radical upgrade attempts
It should have been a job offer to die for. When Chris Jones, the worldwide chief executive of J. Walter Thompson, called Bob Jeffrey in the spring of 1998 and asked him if he wanted to assume the presidency of the flagship New York office of one of advertising's best-known agencies, Jeffrey - then a moderately successful 44-year-old ad exec installed at a regional outpost of Lowe & Partners - might have been expected to jump at the chance. He didn't.
The move would be a vault up the professional ladder, sure, but it was also a step into advertising's current version of hell. "I agonized over it," Jeffrey says now. "More than one of my friends told me I'd be crazy to go to JWT."
By the late '90s, America's oldest living advertising agency was practically on life support. Major accounts were bailing. Executive heads were rolling. Lawsuits were flying, and charges of discrimination were hanging in the air. On top of all that - and perhaps worst of all - JWT, which in days gone by had been a pioneer in television advertising, seemed to be sleeping through the new media revolution that was beginning to reshape the ad business.
But Jeffrey had that unshakable Madison Avenue belief that anything - including a tired ad-agency brand could - be reinvented with a fresh pitch, splashy packaging, and maybe a spiffy "new and improved" label. So he took the job and immediately began to stamp "digital" all over the stodgy old shop - in its new-business presentations, on brochures, in conversations. Meanwhile, to make sure there was something behind the repackaging, he scrambled to put together a digital team.
An announcement, a quick hire or two, a few pep rallies, and voilà, JWT was reborn per Jeffrey's plan - a script cluttered with jargon about the agency being "digital-ready" and able to "provide digital solutions, redefining our own business and delivering communications based on the premise of converging content and commerce."
If that sounds like the kind of blather that could just as easily have come from other big ad agencies down the road, like Young & Rubicam or McCann-Erickson, it is. But here's the kicker: Two years into JWT's repackaging, people are starting to buy it. In recent months, the New York office has reeled off an impressive run of new business wins, raising the agency's media billings by $500 million over a year ago. Jeffrey's plan to use a two-pronged technology - drawing Web-promotion dollars from the agency's packaged-goods clients (who, like JWT, have suddenly begun to realize they're behind the curve on interactive marketing) while attracting more tech-oriented companies - has scored business from old-line clients like Lipton, Lever, and Merrill Lynch as it's pulled in new accounts, such as Qwest, and a batch of dot-coms, like i-planet, the ebusiness joint venture of Sun Microsystems and AOL.
Jeffrey has been nailing these pitches by making the case that old-geezer agencies like JWT are the best partners for large brands transitioning into the digital age. (At one recent play for the online business of major travel company Rosenbluth International, he won over a wary group in a couple of hours without even a de rigueur follow-up meeting.) Citing JWT's size, its experience at reading consumers, and its ability to craft stories around brands, Jeffrey argues that classic ad agencies that take a crash course in digital marketing will prevail over the upstart tech shops, like Organic or Agency.com, in the battle for control of marketing budgets in the new media landscape.
But do size and experience, JWT's trump cards, count for much in a dynamic environment that favors agility and innovation? With broadband and convergence rushing at them, brand marketers are nearly panicked in their need to (a) move beyond passive TV commercials to build relationships with consumers and (b) seamlessly integrate branding across old and new media, so that the Web, television, and other media messages feed off each other.
Jeffrey promises to deliver both interactivity and integration across media, though that's nothing new. "Every agency worth its salt is now back on the integrated pitch because of the dynamics introduced by the Web - but JWT is a long way behind the curve on this," says Alex Letts, CEO of Publicis Technology, a London-based ad agency with offices in San Francisco and New York. Critics say that while JWT and other big agency dinosaurs may toss around digital buzzwords, they're still hooked on old media - which is why, according to Letts, they will "roam the earth for a few more years but will perish ultimately."
Kyle Shannon, creative director at Agency.com, adds that if JWT tries to poach too much on interactive turf (Jeffrey has increasingly been butting heads with small tech shops) the giant will quickly find itself out of its depth. "They believe advertising is just about making assertions in commercials," Shannon says. "But that's not how interactive marketing works. It's about direct contact with consumers, product demonstrations, getting involved with inventory. These guys just know how to make ads. Interactive represents a fundamental shift that they don't understand."
Jeffrey has heard all this before, of course, and has factored such skepticism into his pitch. Essentially, that pitch comes down to this: The dinos can learn technology faster than the techies can learn the tricks of persuasion. "We're already getting up to speed on the tech part," Jeffrey says. "And when it comes to the actual brand-building - the hard part - we've got a head start of a hundred years."
The Company
Back when television was the new frontier, J. Walter Thompson led the advertising charge, backing the first sponsored TV show, for Libby's, in 1930 (playing to an audience of 44 TV sets nationwide), as well asKraft Theater, the first drama show with live commercials. But when it came to embracing new media, JWT got a late start. By 1998, most of the major agencies had either bought or launched some type of interactive subsidiary. While JWT had launched a modest digital department in Detroit, at the behest of client Ford, there was nothing in New York headquarters.
It was a conspicuously slow beginning. A 1998 report from Forrester Research focusing on efforts to address interactivity excoriated JWT for being one of the least progressive agencies, grading it C-. But that wasn't the whole problem: Throughout the 1980s and '90s, JWT kept adding heft under the ownership of British-based WPP Group (one of several global conglomerates that dominate the ad industry today), until its worldwide media billings grew to $8 billion, with offices in more than 80 countries. Like other aging Madison Avenue pioneers, JWT seemed to slow down under its own weight, becoming "more of a club than an agency," says Letts. And that eventually fed into a meltdown in New York in the late '90s.
The first sign that something was rotten came when the agency's creative director, James Patterson, announced he was leaving to pursue a higher calling: writing novels about serial killers. If only he'd stuck around, he'd have seen some real bloodshed. As the agency played musical chairs with its staff, major clients - and particularly companies with a stake in technology, who didn't need a Forrester report to tell them JWT was digitally dumb - started jumping ship.
Kodak, Citibank, Sprint, and Dell Computer all left during a turbulent period between 1997 and 1998. Dell twisted the knife by refusing to pay some of its bills, which drew a lawsuit from JWT, and, in turn, a countersuit by Dell accusing the agency of incompetence; the matter was eventually settled out of court. (In fairness to JWT, it seems likely that politics played a role in the dumping; Dell had hired a new marketing chief who wanted to bring in his own agency.)
As problems mounted, WPP installed British ad exec Chris Jones as head of JWT, and he promptly cleaned house in New York. Outgoing executives didn't go quietly, and one dispatched female creative director charged the agency with discrimination. (The suit is still pending.) "Heads rolled, and it was bloody," Jones acknowledges.
As if all this weren't bad enough, JWT was suffering a serious case of sibling envy. Ogilvy & Mather, also owned by WPP, was flourishing just as JWT was crashing. Spearheaded by its OgilvyInteractive division, the agency emerged as a leader in integrated marketing - integrated being the buzzword (considered by most to be half-bullshit, half-critical) on Madison Avenue in the late '90s. While many agencies were blowing smoke on the subject, Ogilvy's "360-degree branding" concept - everywhere you turn, you run into impressions of the brand that reinforce the last impression you saw - yielded one of the most cohesive, ubiquitous multimedia marketing campaigns of the '90s, IBM's "letterbox" campaign.
The widening disparity between the two agencies did not go unnoticed by their parents in London. Eric Salama, CEO of wpp.com, which oversees interactive interests, says Ogilvy had an innate advantage. "They had a strong heritage in direct marketing that went back to David Ogilvy, and that helped them adapt to interactive more easily," he says. JWT, meanwhile, had always been more focused on commercials.
Others suggest that while JWT was content to service an aging client base, consisting mainly of old-world packaged-goods companies that had little need for the Web, Ogilvy caught a big break when it won the IBM account in the early '90s. "IBM dragged Ogilvy through three years of serious pain to modernize its thought process and business processes," says Letts.
The two shops may be related, but they're also fierce competitors, so Ogilvy's progress hasn't done much to help JWT. Still, Salama felt all along there was hope if JWT could follow the Ogilvy model by creating a homegrown, in-house interactive department. This was a departure from the quick-fix approach other agencies were taking, as they acquired an interest in existing technology shops and tried to cobble together loose alliances. But Salama felt it was the only way to make the turnaround happen. "If interactive is going to be central to what the agency is doing," he says, "it should be a core part of the agency's operations."
Of course, that meant JWT had to build from the ground up, which meant finding someone who knew something - anything - about digital. Bob Jeffrey was no techie, but he used to work in San Francisco - on the Sun account, no less. He talked about Scott McNealy a lot, and told everyone that he'd been "drinking the Kool-Aid." Jeffrey was the chosen one. He had to be.
The Visionary
Jeffrey was not an obvious candidate for a big-agency corner office. While he had done reasonably well - he ran his own small creative shop in New York for years before taking charge of the modest Lowe & Partners regional office in San Francisco - he was no world-beater. A somewhat unimposing, eager-to-please, honest-to-gosh nice guy (not necessarily a compliment in the balls-out ad business), Jeffrey had a refined taste for Bertolucci and Godard but really worshiped Bill Bernbach. Schooled at the legendary creative agencies Doyle Dane Bernbach and Chiat/Day, he didn't actually work on ads himself, but he had a knack for selling the wild ideas of creative hotshots to skittish clients - in advertising parlance, he was a suit with a soul.
Jeffrey might have remained just another Mad Ave account guy if it weren't for his ability to go west and reinvent himself. After Goldsmith/Jeffrey, his small entrepreneurial agency, was gobbled up by Lowe & Partners/SMS in 1996, Jeffrey was shipped to San Francisco. For the next two years, he managed the Sun account. During his tenure, the agency launched one major Sun campaign, perhaps best remembered for a technophobic-sounding headline, "Stop the Technology Madness." This was replaced by the more successful "We're the dot in .com" campaign - which Jeffrey had nothing to do with. He had minimal contact with McNealy, but nevertheless adopted the charismatic Sun CEO as a role model and began to invoke his name often. (Never mind that McNealy, who named his dog Network and once built an ad campaign around that, has never displayed any great respect for ad agencies or marketing in general.)
By the time Jeffrey returned to New York, he was using the lingo of a Valley child. JWT New York brought him in as a full-fledged new media visionary, and he immediately started to evangelize. Jeffrey declared that the television commercial was dead (not the first time the troops had heard that one). He talked about his Silicon Valley experiences, and promised a McNealy-like approach - big on vision, innovation, and entrepreneurial spirit - for the hidebound and bureaucratic JWT.
For a little extra drama, on his first day, Jeffrey even invoked Latin American revolutionary Che Guevara. "I told them how Che had come from the outside and taken this small group of followers and basically changed the world," Jeffrey says. "And I said that if he could do that, then we could change J. Walter Thompson."
Jeffrey wanted to change not just the agency, but some of its most entrenched client relationships. He'd taken the job partly because he couldn't resist the urge to play with - and reinvent - great brands. JWT was itself a household name in the ad biz, and its roster included packaged-goods clients like Unilever and Warner-Lambert, who own brands like Lipton, Lever 2000, and Listerine. "To me, JWT's brands were like a big crayon box," Jeffrey says.
Jeffrey knew these brands were anxious to do more relationship-building and image-marketing on the Net - some had even hired digital marketing directors. The online budgets for many packaged-goods brands have remained small (on its Lipton Brisk brand, for instance, Unilever has earmarked only $1 million for online ads this year), but many feel that will change as broadband allows marketers to produce TV-quality commercials on the Web. Rather than a death knell, this school of thought goes, broadband will mean a boon to the old-school agencies that - if nothing else - know how to make a brand dance with humorous storytelling while subtly pushing consumers' buttons.
Of course, this assumes next-generation Web ads will continue to rely on pithy emotional appeals, punch lines, and the kind of sound-bite creative approaches favored by classic advertising. An opposing school thinks new marketing is more give-and-take - detailed content, more interaction, less manipulation. But Jeffrey - who, at a recent new-business pitch, was holding notes that scripted every moment of the meeting in tiny handwriting - has constructed a plan to win no matter how interactive advertising evolves. The cornerstone of that plan is the newly formed content/entertainment division at JWT, known as ©JWT. How to pronounce that is something of a mystery - but, hey, it looks cool.
The Overhaul
One of the first people Jeffrey brought in was a new worldwide creative director, Bill Hamilton, who immediately helped the agency win a big pitch for the Merrill Lynch account. Something of a legend in the ad business for his award-winning campaigns, including Ogilvy's IBM work, Hamilton has had a mercurial, in-and-out career that has seen him repeatedly rise to stardom and then disappear on extended sabbaticals. How long he'll stay at JWT is anyone's guess, but he's already had an impact: He dismantled the layered bureaucracy in the agency's creative department ("The place had a sphincterlike structure when I got here," he says), gave more creative autonomy to staffers, and quickly turned out some livelier TV commercials, including a Kellogg's campaign that stunned the industry by earning JWT top honors at the Cannes advertising festival. (The quirky, wordless spot showed a bunch of disheveled students stagger out of bed, crunch on cereal, shove their dishes aside, and flop back into bed as the ad's tagline whispers, "Breakfast is back.")
But livening up commercials was clearly the least of JWT's challenges. Jeffrey had promised that commercials were history, so he had to at least suggest what would take their place. He hired Marina Hahn from the William Morris Agency to head up his ©JWT division. Her fuzzy mandate: Develop content that could move beyond 30-second pitches to take the form of, say, sponsored Web entertainment programs. The nascent division quickly aligned itself with Brillstein-Grey Management (a division of Basic Entertainment), the red-hot producers ofThe Sopranos.
The bet, Hahn says, is that the content division will pay big dividends as convergence takes place. Meanwhile, questions like "What the hell is your division working on right now?" tend to go unanswered.
Hahn, like Jeffrey, prefers to talk more in terms of vague, blue-sky possibilities than mundane, everyday realities. She says the content division may use Brillstein-Grey's talent to create TV shows financed by JWT clients - "De Beers could provide programming for the Romance Channel," Hahn says. And there are rumblings that Listerine may use Hahn's group to create a webcast special starring one of Brillstein-Grey's entertainers (a comedian to be named later) and incorporating mouthwash into the show. While it sounds like next-generation product placement, JWT executives insist the end result will be more sophisticated. For now, there's nothing to do but take their word for it.
The most critical hire for Jeffrey's recasting was a digital director who turned out to be Kevin Wassong. Wassong, who had worked alongside Jeffrey on the Sun account at Lowe, became the head of the digital@jwt division - in effect, making him JWT's technology guru. But as with Jeffrey, Wassong has limited experience in the tech world. He started his career in Hollywood developing TV shows, includingEmpty Nest. Then he jumped to the ad business as an account guy, working on interactive accounts at Lowe and then briefly at a production company called Radical Media where, he says, "I caught the bug."
Whether this qualifies him to be a digital guru is debatable: "Do I write code? No," snaps Wassong. "I'm someone who understands the big picture of technology and how it applies to business."
Wassong's group works with dot-com clients and creates interactive ads, Web sites, and other digital solutions for general clients. He insists the purpose is not just to extend JWT television campaigns to banner ads and Web sites, but to include digital as a possibility right from the beginning, when figuring out which media forms a campaign will take. The digital group - now a staff of 40, many poached from tech agencies and Web design firms - participates in all the pitches these days, and sometimes takes the lead role in presenting.
After any client win, the digital group becomes part of the core client/agency strategy team. As such, Wassong may propose that a client's campaign launch with rich-media Web advertising rather than TV advertising, or that the lion's share of the budget be earmarked for interactive promotions on the client's Web site or on other sites. The point, Wassong says, is that with JWT the digital piece is not just an add-on.
Needless to say, this approach runs counter to the historic nature of JWT and other classic agencies: In the traditional agency model, digital is not where the money lies. The bucks are in big-budget commercials, as the agencies reap a cut (usually about 15 percent) of the broadcast-media buy. For that reason, says Clement Mok, chief creative officer of the digital marketing agency Sapient, conventional agencies "are not structured to think of digital as anything more than an afterthought."
Increasingly, however, JWT has been moving away from the old compensation structures that favor broadcasting. These days, many clients pay JWT a negotiable fee based on the complexity and workload involved in a campaign - not just on the media expenditures. But even as this diminishes some of the bias against new media, there is still the comfort-level factor. Working in interactive "demands a completely new skill set for an ad agency," says Jeannette McClennan, the president of OgilvyInteractive. "You're not just doing marketing and advertising on the Internet. You have to build complete ebusinesses for clients, and then help them interact with customers."
The rule of thumb is that classic agencies are better at the advertising part of the equation, while the new-breed agencies are better at the biz strategy. But with many clients wanting one partner, to encourage a cohesive message, the question is, Which side can most effectively poach on the other's expertise? Ogilvy's McClennan, who came to O&M from Organic, says we may see more tech agencies trying to merge with small creative shops to gain marketing savvy. But until that happens, the over-the-hill gang may have the upper hand: "What clients really need is depth of marketing expertise," she says, "and you can't get that out of recent college grads, no matter how smart they are."
Indeed, many in the tech-agency category, like Organic and Agency.com, "have been struggling to learn how to become ad agencies," says Tony Romeo, who runs Unilever's digital marketing group, which recently hired Agency.com for a Lipton Brisk digital assignment - only to bounce the business back to digital@jwt after less than a year. Romeo says the tech agencies are trying to become more traditional marketers, but they "still don't have the experience and understanding of how to build a brand. They're exciting and full of good ideas - but haven't always been able to deliver." Hence, he adds, in the ongoing battle between the new technologists and the veteran persuaders, "the momentum has lately been shifting back to the ad agencies."
The Work
The real test for Jeffrey's redesigned agency is whether it can produce the kind of seamlessly integrated campaigns it has been so enthusiastically promising. For the most part, JWT has yet to walk the walk in the digital realm, but there are early signs of progress. Forced to seek out alternative creative outlets for J&B Scotch, which like all liquor brands is barred from TV advertising, the agency recently launched a Web site featuring a quirky character called the Liquor Fairy, a slightly twisted June Cleaver look-alike with angel wings who plies visitors with drink recipes and catty remarks. The site, which is being promoted in a tie-in withThe Onion, offers MP3 music downloads too. The campaign, which also drives users to the site with print ads, has brought the hit rate to close to half a million a month, while raising awareness of J&B Scotch among the targeted under-thirty crowd.
Meanwhile, for De Beers, JWT has leveraged its manipulative TV commercials (which gently point out that if you spend less than two months' salary on a diamond, you're a cheapskate) to push an equally insidious "Design Your Own Engagement Ring" feature on the company's Web site. A female visitor can design her dream ring, then send a drop-a-hint email to her unsuspecting fiancé. The agency not only built the site but populated it too, driving heavy traffic with an online ad campaign that went beyond banners and used rich media to re-create the look and feel of JWT's stark black-background TV and print campaign. In the month after the introduction of the design feature, De Beers saw a 695 percent increase in traffic, and has seen a total increase of 1,736 percent since June.
The agency also married offline and online media for Warner-Lambert's e.p.t. pregnancy tests. Playing on the success of a series of TV commercials in which couples find out whether they're expecting, JWT carried the real-life soap-opera concept onto partner ivillage.com's site, where visitors can follow what happens to prospective parents who find theyaren't pregnant. An online journal tracks their continuing efforts to conceive without actually going into the bedroom.
All these promising signs aside, none of the agency's early Web work packs the emotional wallop of "Motel," an old-fashioned commercial produced by the agency last year for Qwest Communications. A weird,X-Files-ish spot, the ad features a desolate motel that offers guests "every movie ever made in every language, anytime, day or night," thanks to the power of Qwest broadband.
The ad's characters and locale were a bit unsettling, and Qwest didn't know quite what to make of it. "It sat on their desks for weeks, like it was radioactive," says JWT group creative director George Parker, another agency newcomer. But when it finally ran, it soared. A writer for TheStreet.com nominated it for commercial of the decade, and technology guru Bob Metcalfe called it "the best explanation of what the Internet and bandwidth are about that I've heard." (A follow-up campaign, now airing, shifts the locale to a deserted diner whose jukebox plays "every performance by every artist of every piece of music ever recorded," and a seedy newsstand with "every edition of every book ever published in every language.")
The Qwest spot may be evidence that JWT, right now, still does its best work on the tube. But that's not all bad - especially considering that TV continues to grow in importance as an ad medium for technology companies. The agency still has the ability to connect, to come up with the surprising, breakthrough moment for a brand - which, presumably, will be just as essential for marketers in new media as in old.
The Outlook
As the new century rolled in - year 136, on the JWT calendar - the British bosses were sounding pleased (Salama says WPP is encouraged by JWT's progress), and Jeffrey's spiel was getting more credible all the time. The agency seemed to be starting to win the confidence of its old packaged-goods clients: Unilever, for one, recently handed over two digital assignments, including one for Lipton Brisk that Wassong won with a pitch to bring the iced-tea brand's Claymation ad characters (Frank Sinatra, Bruce Lee) to life on the Web via Java applets, and then letting them roam to other participating sites.
Meanwhile, Jeffrey's new-business pitching machine was still humming in January, when the agency courted i-planet. At the pitch, Jeffrey started with his now-familiar patter about the revolution at JWT, the Kool-Aid, et cetera, then handed it off to Wassong. Wassong showed i-planet a 30-second animated spot created for the Web - and recommended that the client break it online before going to the tube.
The agency also unveiled a print campaign, a redesigned homepage, and a corporate-identity program that let employees design their own business cards. There was even a plan for Hahn's entertainment group to sneak plugs for i-planet into a TV sitcom. The agency hammered i-planet into submission with idea after idea, and when it was time for the bathroom break, the i-planet crowd gave the agency a standing ovation. "To me," says Jeffrey, "that was a vindication that we can really do all the stuff we've been saying we can do."
Never mind that the actual grunt work - producing the campaign and getting results - is still ahead. For the time being, at the new and improved JWT (Now With Extra Digital Added!), the promise on the label is what sells.
Undo: DeBeers' online "Design Your Own Engagement" site was built by Luminant Worldwide (www.luminant.com)
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