Three years ago, Deutsch, with a new management regime and the exodus of plum clients from Coors to Mitsubishi, desperately needed a jolt. But by the end of 2008, Deutsch had been reborn, looking confident and comfortable as a midsize, bicoastal network with two offices flourishing in very different ways.
|Illustration: Robin Eley|
Key to the comeback was a two-year-long new-business tear from Deutsch's Los Angeles office, which has now fully ditched its rep as New York's smaller sibling and become a bona-fide powerhouse. Its haul included PlayStation, General Motors' Saturn, Tesco's U.S. beachhead, and the Dr Pepper Snapple Group, which handed it three brands: Dr Pepper, Diet Dr Pepper and Snapple brands.
The office was so hot, in fact, that some wondered whether it had outshone Deutsch's New York headquarters. But New York has made its own progress. Clients handled from that office include Johnson & Johnson, Novartis, Under Armour, Kodak, Ikea and Anheuser-Busch. It is also home to Deutsch's full-service media arm and is the hub of experiments with new revenue models. For instance, the agency last year put some skin in the game, taking an equity stake in Vineyard Vines, a maker of preppy clothing.
Linda Sawyer, Deutsch's CEO, says the agency is now comfortable in its own niche: "We are extremely scrappy and nimble, yet we have the scale to handle really complex clients."
You could argue the ultimate form of flattery in the agency business isn't winning new accounts, but attracting back old ones -- a phenomenon ad types call "the boomerang effect." Deutsch can brag about both. Recent years saw the Interpublic Group-owned agency strike anew with DirectTV and Swedish furniture retailer Ikea. The homecoming continued in 2008, with the return of Snapple's ad account and, at year-end, Sports Authority. Deutsch's media arm had worked for the sporting-goods chain from 2005 to 2007, and this time around it appointed the agency to handle media as well as public relations.
One of the reasons for Deutsch's prolonged comeback is that the agency boasts a strong brand and workplace culture. The difference today is that it's a toned-down version of the overly brash, in-your-face environment it was just five or 10 years ago, a reputation earned in no small part thanks to its former leader, and still chairman, Donny Deutsch.
"It doesn't always matter what the nameplate is on the door at the agency, it matters who the people are there," said John Gieselman, senior VP-advertising at DirectTV. "You want people that have a particular eye for quality ... who get enthusiastic about the business, and people that have an ability to think beyond doing the same old thing. They come to us with a lot of big, crazy ideas that we don't execute, but if you discourage that as a client, how are you really ever going to get creative stuff out of people?"
For the satellite-TV provider, Deutsch continued its cheeky campaign themed with classic movies such as "Vacation" and "Poltergeist," but also embarked on novel media-planning initiatives last year. The overall strategy seems to have worked, with the marketer expanding its subscriber base by half a million in the second half of 2008, losing fewer subscribers than ever, and for the eighth consecutive year scoring higher than every cable company in the American Customer Satisfaction Index.
Another strong case study for Deutsch is Under Armour. It helped the athletic-apparel maker gain awareness in its quest to outrun rival Nike. While many retailers have slashed marketing budgets, Under Armour has committed to devoting as much as 13% of its net revenue -- estimated to jump 25% from the year-prior period to $750 million to $765 million -- to marketing.
Another new-business strategy Deutsch is employing is internally dubbed "WORs," which stands for accounts won "without a review." Its newly gained client, Kodak, is an example. Kodak reached out beyond its longtime agency of record, Ogilvy & Mather, handing Deutsch its consumer inkjet business, an area the marketer plans to focus on in 2009. And it did so sans review.
"The best [agencies] are the ones that understand the DNA of your brand and work in partnership with you so you don't know where the client stops and the agency begins; certainly you get that with these guys, and they're easy to work with. And, they listen," said Leslie Dance, director of worldwide brand marketing and VP for consumer digital group. "It's a brand new relationship, and so far, it's A-plus."
"One of the reasons we are working with Deutsch is because they are a one-stop shop" that provides "holistic thinking from PR to [customer relationship management] to TV to viral." It helps that Deutsch belongs to a small group of agencies that kept creative and media, and all other marketing disciplines, under one roof rather than separating them into siloes or farming them out to other agencies.
They were some marks against Deutsch in 2008, as it lost Starwood's Westin and USAA. Of concern on the opposite coast is GM's Saturn, one of a handful of possibly endangered car brands.