Will GSD&M's Big Idea Fix the Mess in Texas?

Agency Says New Name, Structure Not a Reaction to New-Account Drought

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When GSD&M staffers arrive at work today they'll be surprised with a visit from one client, PGA Tour Commissioner Tim Finchem. They'll also be treated to video well wishes from bold-name friends Bill Clinton and author Jim Collins. It's all in celebration of changes in its day-to-day management and the hanging of a new shingle. As of today, the company known for 36 years as GSD&M becomes GSD&M's Idea City.
GSD&M Chairman-CEO Roy Spence
GSD&M Chairman-CEO Roy Spence

Sure to go unmentioned amidst the Texas-size pomp and circumstance is a sad fact: A once-great agency is adrift. Recently defected or shrinking accounts such Wal-Mart and AT&T haven't been replaced. And GSD&M's time without a big new-business win or truly breakthrough creative work can be measured not in months but in years, eons in an agency business where momentum is everything.

It's not the Alamo yet, but Idea City is already under siege.

Storm clouds
In recent months, Chairman-CEO Roy Spence has been under intense pressure from the leadership of parent Omnicom Group, a sure sign of trouble given holding company CEO John Wren's typical hands-off attitude toward his agency brands. The main concern, insiders said, has been the ebb of key clients such as Wal-Mart, Brinker International and AT&T, which most recently shifted lead account duties to Omnicom sibling BBDO. Since that shift, these people said, there has been talk of the much larger agency network absorbing the struggling GSD&M. An Omnicom spokesman couldn't be reached for comment.

Mr. Spence, in an interview Aug. 24, denied any forthcoming changes in his agency's place in the Omnicom organization chart and denied that today's announcements are a reaction to any bad news. He maintains that the new-business pipeline is strong, with one new piece of business to be announced today and more in the future. He declined to name them. "Other clients that will surprise [you] are coming in because they love the vision," he said. "We're going to earn our way."

Not all has been bad. GSD&M has picked up business from regional retailer World Market and John Deere. Other clients include BMW, MasterCard, the Air Force and AARP. The agency, which came up short in the recent Best Buy pitch, is also in pitches for the U.S. Census Bureau and Domino's pizza business.

But still, as one executive at a sibling agency said, "Something needed to happen."

Whether the new name and leadership will do the trick remains to be seen. Cutting against it is the fact that the Idea City idea is not precisely new. It, as the press release points out, has been "emblazoned on the agency's Austin [Texas] headquarters for more than a decade."

'Taking a risk'
As Mr. Spence described it, "Idea City is a network for solutions. We'll have the advertising-marketing component, we'll have the purpose-based branding component, we'll have all of our analytics models as a component. We will be the only major advertising agency that will have media planning, market account planning and creative inside of one city." Strictly speaking, GSD&M isn't the only one who offers these things; many agencies do. But, as one consultant said, pushing a new look to the outside world could help.

"To me this is a positive thing," said a prominent search consultant. "They know they are taking a risk, but they've also been pushing that name and concept for a long time, so it's not that big of a risk. I'm not saying they don't have the usual turmoil and that it hasn't been a short-term disaster as far as morale, but I think they'll be OK, and there are several agencies I wouldn't say that about."

The leadership shuffle that adds the title of president to longtime Chief Operating Officer Duff Stewart may well end up having more effect. Even during the recent stumbles, Mr. Spence has shown great leadership, as when he classily withdrew his agency from the second Wal-Mart review amid increasingly absurd circumstances. But many observers have suggested that Mr. Spence's attention is stretched between the agency he co-founded and the political career he is said to be eyeing.

Political inclinations
Mr. Spence oozes a plain-spoken Southern brand of charisma that, when working, is downright Bill Clintonesque. A longtime friend, he is advising Hillary Clinton on her presidential bid. He's often put in the frame for public office in Texas, and his recent announcement of a walking tour across America, an activity more appropriate for a candidate than an agency chief, did little to quell that talk.

Still, he declared in the interview, "The founders of GSD&M are not stepping down; we're stepping up. We are going to help our next generation co-create the future with Idea City."

This talk about the future isn't surprising considering how heavily history weighs in how GSD&M presents itself. The agency -- formed by Mr. Spence, Tim McClure and two friends from the University of Texas -- has created memorable slogans such as "Don't Mess With Texas," and it grew into a formidable midsize agency on nothing less than the big budgets of major American companies.

Today's press release touts this heritage: "We've been blessed to help build some of the most successful companies in America and to work hand in hand with iconic business leaders of our time, including Herb Kelleher, Sam Walton, Norm Brinker and Ed Whitacre."

Perhaps most symbolic of time's unkindness to GSD&M is the fact that two of the companies represented by that quartet of American-grown entrepreneurs, Wal-Mart and Chili's, have pulled their business from GSD&M in the past 12 months.
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