It turns out that breaking up isn’t so hard to do after all.
The news that Interpublic Group of Cos. Deutsch was splitting into two separate ad agencies—New York and L.A.—was one of the bigger stories of 2020, and produced a lot of head-scratching among agency observers. But the truth is the two branches of the shop had grown apart. “Deutsch LA and New York had been on divergent paths for a long time,” says Deutsch LA CEO Kim Getty. “And when Mike Sheldon retired, who had been the chairman of North America, we just made the decision that we would be stronger separate.”
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Actually, the Deutsches planned to announce their parting in March, but when the pandemic hit, the shops decided to wait for things to settle some, making the separation official in October.
So in an industry of rampant agency bundling, Deutsch LA came unbundled. And since then, things have been looking up nicely on the west coast. Deutsch LA hired 100 people last year, won 100% of its pitches and got 31% of its revenue from business won during the pandemic year. That included new accounts Lowe’s, PetSmart, Kendall Jackson, Powdr, Wawanesa and digital transformation projects for Microsoft and Eko.
The last relationship with the Walmart-backed tech company grew from working together jointly on Walmart’s virtual summer camp. The agency added a performance marketing practice and dug deeper into digital, with 20% of its revenue in 2020 coming from that discipline along with data. It produced some eye-popping experiential campaigns. And Deutsch’s in-house production company Steelhead also saw work soar 15% last year.
It also grew revenue from existing clents: Taco Bell gave Deutsch LA added global duties, which allowed the agency to expand into the Europe, Middle East and Africa region for the first time.
A divided Deutsch helped L.A. lean into its strengths, Getty says. “We love living at that intersection of entertainment, technology and culture, a place where trends are really born,” she says. “A really smart person who came and spoke at Deutsch a few months ago talked about how L.A. is a sort of maker culture where culture is born, and New York monetizes it.”
And so Deutsch LA has been doing its best to make it.
For Walmart, Deutsch, a newcomer to the roster, ended up producing the giant retailer’s biggest campaign of the year behind the September launch of its Walmart+ membership program. It’s Walmart’s version of Amazon Prime, but with a heavier emphasis on home delivery from stores. Deutsch came to Walmart with the idea of sending documentary crews (following COVID-19 safety protocols) into 22 homes that were given early access to Walmart+ to record what difference the convenience and time savings made in people’s lives. The nearly 100 hours of footage was turned into an ad campaign.
“We brought Deutsch in for a little bit of different thinking,” Walmart U.S. Chief Marketing Officer William White said at the time. “The work they’ve done over the past several years for a number of clients speaks for itself.”
Walmart hasn’t released Walmart+ membership numbers, but the campaign appears to have reached its goal. By early this year, Walmart pulled back on marketing spending behind Walmart+ while it steps up investments in stores and regional fulfillment centers to meet demand. The program helped Walmart post a 37% increase in e-commerce sales for the quarter ended April 30, on top of strong year-ago growth spurred by pandemic panic buying.
Deutsch LA went on to do more work for Walmart over the year, including on a virtual interactive summer camp, powered by the Eko interactive storytelling platform with high-powered “counselors” that included LeBron James, Drew Barrymore and Neil Patrick Harris and hundreds of interactive activities. Camp by Walmart was popular enough that it continued into activities for Halloween and the 2020 holiday season and helped inspire an interactive shoppable cooking project launched this spring.
Deutsch LA also enabled Walmart to host a spectacular holiday drone show that put fireworks displays to shame. It featured 1,000 drones forming holiday shapes and colors set to 20 minutes of seasonal music, bringing joy to families and yielding 7.3 million YouTube video views.
In another experience-driven move, the agency in February, right before lockdown, adopted the hot concept of a marijuana dispensary for a not-so-hot product: milk. For client Real California Milk it created a pop-up-shop on a busy Venice, California street to showcase dairy in the same sleek manner of a weed dispensary, complete with micro-dosed butter and cheese edibles. The daring dairy stunt resulted in 200 million impressions.
For Taco Bell, Deutsch LA searched for a way to make pro forma “HBD” wishes of social media more meaningful by turning them into an e-commerce opportunity. The result was the Taco Gifter, a tool incorporated into the chain’s mobile app and tacobell.com that made it possible to give someone a real taco rather than an empty platitude.
“Our digital lives often feel less than meaningful,” says Deutsch LA Chief Creative Officer Karen Costello, who rejoined the agency in October of 2020 from The Martin Agency. “The idea came up of, ‘What if, instead of just saying “Happy Birthday” and sending a cake emoji, you could actually send someone a taco?’ And then the team was like, ‘We can actually create that.’”
“We’re extremely proud of our long-standing relationship with the rock star team at Deutsch LA and of the collaboration and ideas they bring to our partnership,” says Nikki Lawson, global chief brand officer of Taco Bell Corp. “They’ve proven time and time again to drive our business with insightful brand strategy and creative thinking that shatters conventions and delights our passionate fans.”
So while the breakup may not have been conventional, in 2020 at least, Deutsch LA proved the better half.
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