Then came the morning of Jan. 30, 2007.
Industry headlines brought news that General Motors Corp.'s Saturn brand was parking its $190 million account at rival West Coast shop Deutsch, Los Angeles. The move came without a review -- and even without the courtesy of a call to the incumbent.
"It was a body blow," says Steve Simpson, partner-creative director at Goodby. Draconian measures, such as mass layoffs, could have come with a loss that size. But Mr. Simpson and the San Francisco agency's other partners decided to cut "fewer than we could have -- and we pitched for our lives."
By spring, the blow had been absorbed and Goodby was on the offensive, having won three major accounts with more than $2 billion in total billings that led the agency to almost double its staff. The blockbuster accounts were embattled telecom Sprint, at $1.2 billion in measured media spending, and automaker Hyundai Motor America, at $600 million.
But to see just how in-demand Goodby is, you have to look overseas -- way overseas, halfway around the world.
Mark Buckman, chief marketing officer at Commonwealth Bank of Australia, wanted nothing less than "the best agency in the world. ... We wanted to be world-class in everything we do -- service, operations, product delivery and in our communications." Starting with a search consultant, Mr. Buckman whittled the list vying for the $100 million-plus account to two European contenders, Bartle Bogle Hegarty and BMB, and two U.S. contenders, Crispin Porter & Bogusky and Goodby. As Mr. Buckman flew from pitches in England to the U.S., he was so satisfied with the London presentations that he was starting to think visiting the U.S. shops could prove an unnecessary exercise.
Then he spent two hours with Goodby. He reviewed cases of brand transformation and, of course, schmoozed, dining with the Goodby guys at the Clift Hotel's Asia de Cuba restaurant. "It was an absolute fit," Mr. Buckman says. They use live streaming video to teleconference over the ocean that separates them. "Every day I work with them validates our decision to appoint them," Mr. Buckman says.
Making HP 'personal again'
For a couple of years now, Goodby has been firing on all cylinders. There's that new-business story, but what's even more impressive, especially for a shop with a highly creative DNA, is Goodby's success in accumulating strong business case studies for big brands. Chief among them is Hewlett-Packard Co., for which Goodby has crafted a glossy, celebrity-drenched yet relevant effort. Its "The computer is personal again" campaign has helped HP gain the lead in worldwide market share for personal computers and imbued a once-faded brand with some cool.
For Frito-Lay's Doritos, a smart user-generated Super Bowl ad and a windfall of press coverage kicked off a sales-boosting platform built around customer involvement in the brand -- not an easy play for a low-involvement category such as snack chips, but it worked.
"They are a creative think tank for marketers," says Russel Wohlwerth, partner at Ark Advisors, a consultancy that manages account reviews.
Maintaining the creative-think-tank model hasn't always been easy. Goodby's recent path to the top was a meandering, somewhat serendipitous one. It began in 2003, when one of the shop's rising talents, Jeff Benjamin, left to join Crispin Porter & Bogusky, where he formed an interactive division and attained a rare sort of ad-biz glory with the Subservient Chicken viral program for Burger King Corp. Mr. Silverstein says Mr. Benjamin's success got him and the agency to seriously rethink their modus operandi.
Mr. Robson also analyzed the shop's workload and its employees and saw a shift in the agency from a traditional shop to one where most of the work is interactive. As of last September, Goodby's output officially became digitally driven, with 52% web/interactive output, up from 50% the previous September.
"Last year, we were trying to figure out how to get our clients to pay for all of this," Mr. Goodby says. "Now, if there's no TV, clients say, 'That's interesting,' and don't have a coronary."
But web output had the potential to give agency bookkeepers coronaries. While new media is cheap compared with traditional outlets, creative development costs just as much. Goodby has solved the problem by moving to a cost-per-hour model, executives say.
Not only has the output changed, but so has the way the agency produces it. "There are no boxes here anymore," says Mr. Silverstein, co-chairman and co-creative director.
The agency has been reformulated to allow crossover among disciplines, meaning an interactive director can do TV spots or vice versa.
Similarly, Mr. Silverstein says creative ideas for solving a marketer's problem aren't necessarily restricted to the creative department anymore. The agency won the Sprint pitch with the SprintSpeed campaign currently airing, which uses colorful neon lights as a metaphor for speed. It was developed by the agency's in-house motion-graphics department, which took sojourns into Delores Park on clear nights to experiment with photographs of colored lights emitted from flashlights.
"We have a collection of artists here in the building -- I like to think of it as the Bauhaus," Mr. Silverstein says. Indeed, the Bauhaus metaphor has taken stronger hold with the 2007 account wins that have allowed the agency to add more than 200 employees, including an infusion of talent from unusual places.
"We used to recycle talent from Wieden [and] Chiat -- a mutual-aid society of creative professionals," says partner Mr. Simpson. New hires include a rapper known on YouTube as Jelly Donut, a car expert who Mr. Goodby says knows almost everything about every car that's ever been on the market and a founder of an improv group called Killing My Lobster. It also includes students from Sweden's Hyper Island digital-media and management school, where one of the agency's recruiters, Zach Canfield, went to teach a class to get to know prospects before hiring from a résumé.
The melding of these new employees into a unique agency culture and the handling of a larger workload will pose key challenges to Goodby. Ever relevant for creative shops is the question first posed by the late Jay Chiat: "How big can we get before we get bad?"
Can Goodby's culture, its flat structure and its ability to encourage original, distinctive work go mass with 500 or more employees? Goodby "prizes originality but doesn't punish the misfires," Mr. Simpson says, adding: "There are no right answers in this business -- there are just better answers. A lot of different voices come through, not just one style. It's a democratic culture. We approach a brand and try to find a voice for that brand. There's an HP voice, not our voice."
Mr. Simpson, as well as some of the marketers working with the shop, view project management and additional "procedures" as possible ways to handle the agency's burgeoning workload, something some consider anathema to creativity.
There's also another important yet enigmatic agency value that may be hard to translate: integrity. Ann Mukherjee, group VP-marketing at Frito-Lay, which added Cheetos creative to Goodby's previous assignment for Doritos, cites "integrity" and "character" as key Goodby selling ingredients. "They don't just do the right thing; they do things that are right," she says. "There is a difference."
As if to fly in the face of growth concerns, Messrs. Silverstein and Goodby plan to move their agency into a position where it will make money on endeavors beyond making advertising.
'Our own Pixar'
"Content is an evolution of where agencies are going," Mr. Silverstein says. "We have become a content house. We, in a sense, are our own Pixar. [In 2008] I hope to evolve to a point where we make more content for our clients and ourselves."
But as Goodby tries to make that leap, there are stiff business challenges for its current crop of marketers. Neither Comcast nor Sprint is faring well in battles against AT&T and Verizon. Bill Morgan, senior VP-corporate brand marketing at Sprint, says the telecom is "very pleased with the campaign" that has "changed the dialogue in the industry" from minutes and price to speed. Still, No. 3 Sprint is bleeding customers and made BusinessWeek's "Dog of Wall Street" stock list.
|Past five Agencies of the Year|
BBDO (Omnicom Group)
Crispin Porter & Bogusky (MDC Partners)
Berlin Cameron/Red Cell (WPP Group)
Deutsch (Interpublic Group of Cos.)
It's not a totally smooth ride with Hyundai either. Hyundai's sales improved last year but apparently not enough to meet optimistic goals from South Korea, leading to some rethinking of the agency's low-on-visuals-showing-sheet- metal "Think about it" repositioning campaign and plans for two Super Bowl spots. The automaker ended that pre-game waffling late last week by announcing that it remained committed to keeping the airtime in the Feb. 3 game.
And though Goodby has been showered with accolades for transitioning to digital, the metamorphosis is hardly complete, as marketers working with the shop note. David Roman, VP-worldwide marketing communications, Personal Systems Group at Hewlett-Packard, who praises the agency for significant contributions to HP's success, also says Goodby still has to master the social web and work out its position on public relations, where the line with advertising has begun to blur. While Mr. Roman sees the one-office shop as key to the agency's success, he notes that questions remain about how Goodby can serve marketers with global needs.
To Mr. Silverstein, size doesn't particularly matter. "It's about the work," he says. "Every account is treated with the same intensity. We care about everything we do."