Agency of the Year: TBWA Chiat/Day

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TBWA Chiat/Day's inaugural spot in Apple Computer's "Think Different" campaign salutes the crazy ones, the rebels, the troublemakers, the ones who see things differently.

"You can disagree with them . . . The only thing you can't do is ignore them," voice-over says. "They change things."

Those words could easily be used to describe TBWA Chiat/Day--an agency that, for its cutting-edge creative and impressive new-business winning streak, has been named Advertising Age's U.S. Agency of the Year for 1997.

REPEAT WINNER

This is the third time Ad Age has awarded that honor to the agency in some form. Chiat/Day was named U.S. Agency of the Year in 1988 and 1980. Also, in January 1990, it was named Agency of the Decade by this publication.

It is the first time, however, the two-year-old combined agency has won the award, attesting to the strength of the 1995 merger thought by many to signal the end of the creative culture Chiat/Day had defined.

Instead, Bill Tragos, founder, chairman and CEO of TBWA International, harnessed the energy of the shouting matches between Bob Kuperman, president-CEO of TBWA Chiat/Day North America, and Lee Clow, chairman of TBWA Chiat/Day and chief creative officer worldwide, to parlay revenues for its North American operation, excluding Canada, to $190 million based on capitalized billings of $1.4 billion, reflecting business wins of almost $400 million in 1997.

Last year saw the reemergence of the creative prowess of Mr. Clow, at 54 the still-surfing beach boy who from the start thought differently enough to refuse to move away from his beloved Southern California beaches to pursue an advertising career. Now, he has built a creative kingdom on the premise of the West Coast as the epicenter of the new age of communications from which he can reign internationally.

"Lee Clow's heart has been pumping this sorry industry full of inspiration for longer than most of its practitioners have been alive," said Dan Wieden, president of Wieden & Kennedy, Portland, Ore. "He is a giant. He is the real thing. He is indefatigable. I hate him."

NISSAN SALES FLAT

Mr. Clow's boldest move in his agency's latest renaissance was his attempt to find advertising's Holy Grail--automotive ads consumers wouldn't hate.

With it, he developed another in his series of hip icons, this time offering Mr. K, a whimsical Asian man of mystery based on a former Nissan Motor Corp. USA executive known for pursuits such as kite-flying expeditions.

Despite copious spending-- more than $300 million in the first year alone--the campaign failed to improve Nissan sales. Eventually, Bob Thomas, Nissan's president-CEO, resigned under pressure; Rob Siltanen, Mr. Clow's heir apparent, succeeded Mr. Clow on the account as creative director.

Mr. Clow says his advertising changed consumers' perception of the brand and can't be faulted for Nissan's sales difficulties. "I didn't have much impact on the cars Nissan designs," says Mr. Clow.

`THEY'RE THE RISK-TAKERS'

The bold creative foray inspired others in the auto business.

"They did us a great service" awakening the industry to the need to speak with the consumer, not at them," says Joe McDonagh, executive creative director, Saatchi & Saatchi, Torrance, Calif., agency for rival Toyota Motor Sales USA.

"They're the risk-takers," says Ian Beavis, marketing communications manager, Ford Motor Co.'s Lincoln Mercury Division. "They did something for the category, not necessarily for the client."

TBWA Chiat/Day's record with Nissan's Infiniti, in humorous spots such as one where a man is buried in his car, was more positive, with sales up 17%.

`TOYS' BUZZ

The publicity generated by the Nissan campaign, and particularly executions such as the 1996 "Toys" spot, exhilarated Mr. Clow and his crew. It also led to restoration of Mr. Clow's Midas touch, leading to two 1997 stealth wins, the national creative for Tricon Global Restaurants' Taco Bell account and his reunion with Apple Computer's Steve Jobs.

Mr. Clow already had applied his healing hands to the dying Jack in the Box, a chain damaged by food poisonings, by bringing back its Styrofoam-head spokesperson, not as a toy, but as a sharp-talking yuppie owner.

APPRECIATE THE NICHE

Taco Bell's cure didn't come as easily. First, TBWA Chiat/Day brought the marketer to better appreciate the advantages of its Mexican food niche, despite the company's own cogitations, says one executive familiar with the decision-making. TBWA Chiat/Day's first round of ads showed a pink room intended to serve as a metaphor for a teen-age stomach undergoing hunger pains.

"Our first time out of the gate was not good," admits Vada Hill, chief marketing officer for Taco Bell.

The hunger pains passed quickly enough. One spot in the series unexpectedly turned out be a hit with teens. It featured a chihuahua passing by a female dog in favor of some Taco Bell food.

"Yo Quiero Taco Bell,"--"I want some Taco Bell"--the dog says.

VIVA CHIHUAHUA

TBWA Chiat/Day's new Taco Bell icon proved more effective at sales results than Mr. K. Taco Bell posted more than $4.9 billion in systemwide sales last year worldwide, up 2%, its first full year of same-store sales increases in company-owned restaurants in three years.

Still, when Taco Bell shifted the media buying and regional portion of the $200 million account, it was awarded not to TBWA Chiat/Day but to Foote, Cone & Belding, San Francisco and other offices.

APPLE ASSIST

As for Apple, Mr. Clow answered the call from Mr. Jobs, himself brought back to help salvage the ailing computer maker.

"I don't pick advertising agencies, I pick people," says Mr. Jobs, who cut short an in-progress review to hand the business to Mr. Clow. The "Think Different" branding effort, Mr. Jobs says, will soon result in sales increases.

"Before you start your journey, I think it's very important that you remind everybody that you really know where you're going."

Similarly, TBWA Chiat/Day's ABC work, producing a firestorm of criticism but little in terms of viewership, was praised by the client as a "creative shot in the arm" for the entire network, raising its "resilience and stature," said Alan Cohen, exec VP-marketing, ABC Television. "We hadn't realized the impact an ad agency could have."

A case where TBWA Chiat/Day's branding work has paid off is Sony PlayStation, for which the agency won the '97 Gold Effie. In 1995, Sony--considered a staid electronics company by its target teen male audience--entered a market dominated by Sega and Nintendo with a $300 device likely to put a crimp in a teen's pocketbook.

NO. 1 VIDEOGAME

Last year, Sony raked in $2.5 billion in sales of PlayStation equipment, making it No. 1 in the $5.2 billion videogame market.

"One of the core elements in the success of PlayStation has been being able to carve out a different personality for a brand, says Andrew House, VP-marketing, Sony Computer Entertainment.

Accolades aside, Mr. Clow considers his most important achievement of 1997 to be the end-of-the-year pitch parlaying their PlayStation youth market know-how into a win of Levi Strauss & Co.'s core jeans brand. For the pitch, Mr. Clow hired a cultural anthropologist and interviewed a number of former MTVers to learn how cultural arbiters influence the fashion process.

"There couldn't be a more huge finale to what the year was about," says Mr. Clow.

CARRYOVER INTO `98

Essentially, last year's success has already carried over to early '98 with the Levi's win. This year, however, poses more difficulties and opportunities for Mr. Clow.

On the client side, Levi's sales continue their slide. Tom Patty, TBWA Chiat/Day's president-worldwide account director on Nissan, has dropped duties for his in-house retail agency, Persuasion Group, to focus on the account, with estimated worldwide billings of $600 million. ABC's ratings haven't turned around despite the "TV is good" campaign.

HURDLES TO MOUNT

There are administrative hurdles, too. Bob Kuperman's role was expanded beyond Venice to president-CEO of TBWA Chiat/Day North America, charging him with spreading the agency's success to New York where new leaders are in place. New management also has taken over in Venice and San Francisco.

This fall, the Venice office moves into a new creative community, the latest of the agency's workplace experiments.

`A WELL-BALANCED AGENCY'

TBWA Chiat/Day executives believe the merger will produce an agency that is more than the sum of its parts.

"It's a well-balanced agency--planning is in its blood, strong in account management, creative and media," says Mr. Tragos, calling Mr.Clow an1d Mr. Kuperman "the tip of the iceberg."

Eric McClellan, executive creative director in New York working on Prodigy and Wonder Bra, sees the Big Apple as wide open.

1 "There aren't that many great agencies in New York," he says.

In addition to Mr. McClellan, several groups of senior creative directors form a strong creative bench. Jerry Gentile oversees ABC, The Weather Channel and Sony PlayStation. Chuck Bennett and Clay Williams, Taco Bell and Energizer, and Mr. Siltanen handles Nissan. Peter Angelos is spearheading the Levi's account in San Franciscso. In New York, Ken Segall heads creative on the Apple account and Richard Lewis continues his award-winning Absolut work.

"As he spreads his net wider, he is creating disciples who preach his gospel," said Mr. Williams.

Still, there's no question the agency revolves around Mr. Clow, motivated, he says, by an obsessive nature which thrives on challenges he finds interesting. At the moment, those challenges, he says, are Levi's and Apple.

COMPARED TO ARISTOTLE

"It's a culture led by Lee," says Chris Chalk, Venice's planning director, who compares Mr. Clow to Aristotle. "He teaches by asking questions," said Mr. Chalk.

"I fear that moment" when Mr. Clow decides to leave the business, says John Truscott, co-managing director for the Venice office.

Mr. Clow hopes the agency doesn't need to go through more renaissances, but he isn't worried.

"I bet Omnicom Chairman (Bruce) Crawford, and President-CEO (John) Wren weren't sure what they were getting when they bought Chiat/Day," he says. "I've got people here that believe.

"There is truly a next generation and I'm willing to let the next generation grab onto" the creative cult built by Guy Day, Jay Chiat and, of course, by Mr. Clow, he says.

Contributing: Jean Halliday, Jeff Jensen, Bradley Johnson, Louise Kramer, Chuck Ross, Pat Sloan, Anthony Vagnoni.

Copyright March 1998, Crain Communications Inc.

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