Deutsch 'get-tough' remarks stir rancor in agency world

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Interpublic Group of Cos., once a great advertising holding company success story, this month experienced virtual share-price freefall. Meanwhile, charismatic Interpublic ad agency chief Donny Deutsch (made one of the richest individuals in advertising history when Interpublic purchased his Deutsch Advertising) bit off the hand that fed him at the recent Association of National Advertisers conference.

The effect of both events was to create more depression among the downtrodden agency rank and file. They ask if this state of affairs is the inevitable consequence of allowing the agency business to be subservient to shareholder rewards rather than client needs. They are not happy.

How do I know? One clue: The volume of people asking all of us lucky enough to have a public voice to please write something about what Mr. Deutsch said. Another: The dumping of Interpublic stock and the recent downgrading of its credit rating.

There are many Interpublic workers looking for a scapegoat on whom to pin blame for their missing millions in options and shares. Stepping forward are Interpublic CEO John Dooner and the group's Octagon sports unit. As I write, Interpublic's share price has experienced a 62% decline in year-to-date trading and Octagon is projected to make more than four times the loss predicted two months ago.

Mr. Dooner is taking a pounding. He contributed to the current malaise by paying big for True North Communications when Interpublic acquired that holding company. But, overall, he can be forgiven if he believes the much-admired former Interpublic management team handed him a "hospital pass" when it gave him control of Interpublic. A hospital pass? It's being given the ball by a teammate just before you're crunched by the opposition.

With Mr. Dooner stuck with many depreciating "assets" as a result of the preceding management's expansion drive, it is a time, therefore, for all advertising executives everywhere-and especially within Interpublic-to pull together to set this once great group, and the industry it once led, back on course.

Instead, Mr. Deutsch, who has come to be one of the agency world's prominent spokesmen, and who is regarded as a possible future successor to Mr. Dooner, gave a speech at the ANA that appeared to exhort clients to be even more critical of their agencies' performance. It invited clients to instigate more reviews and throw out "misplaced loyalty to sacred-cow relationships" while slamming creative awards (critics say Deutsch would, wouldn't he?) and prima-donna creatives.

I guess with $200 million sitting in the bank you, too, might feel free to say whatever the hell you like. Perhaps his remarks were really as off the cuff as the lack of a subsequent transcript might indicate; perhaps it was simply the shameless new-business pitch that some have suggested. Either way, it is difficult to see how it helps either Interpublic or the wider industry right now. That's especially so as his comments were delivered before an ANA audience whose own very real financial pressures might lead some to reach out and grab at any stick with which to beat agencies still further.

Stefano Hatfield is editorial director of, and Creativity

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