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April 30, 2001

The most telling impression left by this year's American

Randall Rothenberg
Association of Advertising Agencies annual meeting was the upbeat face it turned toward the ogre of recession.

The insecurity that typifies the agency business even in good times was, to this columnist at least, noticeably absent. Complacency? It didn't seem so. One felt, instead, that the industry has reached a stage of emotional maturity that's putting it back on a par with the consumer products companies it serves and the media companies it finances.

'Bummers worse than this'
As BBDO Worldwide Vice Chairman Phil Dusenberry said in his valedictory address to the trade body he has chaired for the past year, "We've been through bummers worse than this."

Indeed -- and from those earlier experiences the advertising business learned to adapt

  • to new technologies that threatened to bypass it;
  • to downswings in the economy, which in earlier years would cut muscle as well as fat;
  • to clients' changing needs, which once caught agencies unaware;
  • to the realities of a global economy that many professionals once resisted;
  • Creativity to the needs of markets and clients.

This maturity was evident in dozens of minor incidents at the AAAA's conference in Naples, Fla. But it was summed up for me in a side comment by Brendan Ryan, the CEO of FCB Worldwide, in an "acceptance speech" as incoming association chairman, a talk refreshing for its candor and heart. Clients complain about agency profit margins of 20% to 30% on their accounts?

"Well, pardon me," Mr. Ryan snorted. "I wonder what the margins are for the investment bankers who work at Merrill Lynch. ... I wonder what the margins are at the law firms that support our clients."

Impressive new adaptability
You must take the long view to understand how impressive this new adaptability is. These issues were once quite contentious. Go back to the 1980s and '90s, and you'll find advertising's leadership divided. Clients and agencies were battling over profits, with the latter neurotically acceding to demands for ever larger reductions, like cereal manufacturers caught in a price war.

Globalism was misrepresented as a huckster play concocted by large agencies intent on selling single campaigns that could run around the world. Integrated marketing communication was similarly construed as an effort to bundle unwanted ancillary services onto the main offering, the sainted medium of broadcast TV. New technologies and media -- like cable TV -- would never amount to much. Creativity was something that had fallen from large agencies to small, regional upstarts -- and nothing could reclaim it for the big guns. Four A's conferences, it seemed, resonated with the plea, "We're good -- aren't we?"

That diffidence is gone. A panel of large agency creative directors at the meeting sat, nearly gape-jawed, over the mere attempt by their session's moderator, USA Today marketing reporter Bruce Horovitz, to portray them as inept in the face of competition from today's presumed creative gold standard, San Francisco's Goodby, Silverstein & Partners.

"Everybody has spots on their reel they don't want to show, big or small," responded DDB New York CEO Bob Kuperman, not defiantly, but utterly (and appropriately) dismissively. Added Steve Hayden, vice chairman of Ogilvy & Mather: "They come out of Art Center, they're told they should go to Wieden or Fallon to build their books. But when they want a larger canvas, a real budget, they come to us." And they do -- Messrs. Hayden and Kuperman, both former Chiat/Day creatives, serving as Exhibits 1 and A.

Weathering storms
Is my historical lens tinted rose? Perhaps. But I'll be surprised if you can dispute the managerial prowess of current agency leaders, who have weathered recessions, consolidations and market pressures to create multinational entities of surpassing vibrancy. I will be equally startled if a "blind tasting" of "best" reels would find a panel of consumers able to distinguish large agencies from small.

And I suspect few today would doubt the ad industry's ability to adapt, a fact that came home to me in a personal way when, in the bar at the Naples Ritz-Carlton, I ran into a man I hadn't seen in years, Brett Shevack, of the Wolf Group. He looked great, and he was beaming from ear to ear. A summer softball star of a certain age, he is also a first-time father -- and loving every moment of shocking change.

Mr. Rothenberg, an author and longtime journalist, is chief marketing officer at consultancy Booz-Allen & Hamilton.

Copyright April 2001, Crain Communications Inc.

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