Old friends strike up anew with Deutsch

Ikea, DirecTV return to fold; GM work replaces Mitsubishi under Sawyer's refocused rule

By Published on .

lsanders@crain.com

After a bummer 2005, Deutsch last year proved that, though down, it was by no means out.

What a difference a couple of years can make. Advertising Age honored Deutsch as Agency of the Year in 2003. But in 2005, Deutsch lost some of its biggest clients, including Bank of America, Revlon, Mitsubishi Motors North America and Coors Brewing Co. Though it won a few new clients, those plus growth from existing accounts didn't cover the losses, and its 2005 U.S. revenue sank 9.5% to $149.4 million, according to Ad Age estimates.

Deutsch-noisy, opinionated, recognized as a new-business powerhouse-grew quiet. Many questioned whether the losses and subdued style were the result of Chairman Donny Deutsch's removing himself further from the agency and handing the reins to CEO Linda Sawyer and four longtime partners.

But the past 12 months have brought a remarkable about-face for Deutsch. The agency has regained its new-business stature, largely on the strength of management's deft touch. It reconnected with two high-profile former clients and also expanded on relations begun in 2005 with General Motors Corp.

On both coasts, Deutsch executives wooed back former accounts. Ms. Sawyer parlayed a strong connection with Pernille Lopez, Ikea North America president, into a new-business coup. Deutsch partnered with the Swedish retailer for 11 years before splitting in 2000. Talks about reuniting began in 2005, and in January 2006, Deutsch, New York, landed U.S. creative duties, a $60 million account.

Similarly, Deutsch, Los Angeles, executives Eric Hirshberg and Mike Sheldon remained close to DirecTV despite getting the boot in 2004 in favor of BBDO Worldwide. New management at the provider of satellite TV services created the opportunity for Deutsch's smooth re-entry; the $200 million account returned last February.

And GM, long a significant client of Deutsch parent Interpublic Group of Cos., awarded the L.A. office creative duties for its corporate brand and warranty initiatives, which neatly filled the void created by the Mitsu split.

Although Expedia.com, one of Deutsch L.A.'s larger accounts ($170 million), left in 2006 after seven years with the agency, tight bonds with the travel site's ex-executives and founders Rich Barton and Lloyd Frink resulted in Deutsch winning online real-estate operation Zillow.com.

Despite last year's comeback, Ms. Sawyer and New York President Val DiFebo aren't satisfied. A management shake-up led to the November departures of two longtime Deutsch New York executives, Chief Creative Officer Kathy Delaney and Jeffrey Wolf, director of account planning. Replacements are expected to be named early this year.

"Deutsch was not distinguishing itself as the industry changed. They didn't reinvent themselves as other agencies have attempted to do," says creative recruiter Susan Friedman.

That's going to change. "Now is the time to be more vocal-front and center," asserts Ms. DiFebo, who's leading the search to replace Ms. Delaney and Mr. Wolf.

Throughout the 1990s, Deutsch broke new ground for the industry-for example, in direct-to-consumer pharmaceutical advertising. In the early 2000s, it took a tough stance on agency compensation. "We've always been an agency with a story and a [point of view]," Ms. DiFebo says, and that's what Deutsch wants to be again.

Ms. Friedman, the recruiter, believes the answer is to "not repeat Donny but to find a new place in the market."
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