Vol. 23 No. 25 June 25, 2012 The Right Talk Advertising agencies are continuing to search for the ties to be more imaginative than ever before. Digital is best way to position themselves vis-à-vis their clients in just beginning to transform everything that we do, which this age of digital, social media, crowd-sourcing, flash is causing agencies to look at how they are structured in mobs, raves, demanding client procurement departments, terms of (client) teams and work flow. There is a need to fickle and sophisticated consumers, global economic in- create an integrated team with the right resources sup- stability and uncertainty, ad industry consolidation and porting clients. And there is a need to be more facile and when anybody can jump on YouTube to create an ad flexible so that every time there is a change at the client, campaign or attack one the client’s agency has created. agencies are able to recalibrate quickly.” In this age when online and mobile result in instant feed- The willingness to embrace change also is essential. back from consumers on any initiative a client may un- “There is no cement hardening on media anymore. It’s dertake, whether it’s an ad or an event. A viral age when messy and chaotic and liberating. You have to embrace everyone is a critic with his or her own likes and dislikes, the fact that things are always changing. That’s the new and is unafraid to share them. What’s an agency to do? reality,” said David Lubars, the global creative chief at “Stop talking the language du jour and being what BBDO Worldwide. Clients also need to accept that new you’re not. Stop worrying about technology. Don’t fall reality. “If you’re a client, don’t say you care about the into the ‘give me one of those’ syndrome. Concentrate new era of brand building, ask for something inventive on what agencies do best – providing great insights into and then ask for TV to test it,” Publicis’ Gianinno said. the consumer, what drives the consumer and what con- Of course, agencies want to be paid fairly for that in- nects clients to their consumers. In a time when it’s un- ventiveness, but complain that clients and client procure- certain for everyone, tell your clients that there are op- ment deparments often prevent or hinder fair value com- portunities, that they shouldn’t be following the herd, and pensation. “What you’re hearing a lot from clients and should be thinking about how every penny is spent,” said agencies is a sense of the new normal – more work, less David Sable, global ceo at agency Young & Rubicam. people and different compensation arrangements. What Added Sable, “agencies should be thinking about who you don’t hear much from agencies is how they want to their (client) partners are, and understand why they want be compensated for revenue-generating performances to be working with them.” Said Susan Gianinno, ceo for the client,” said Steve Blamer, head of consultancy of the North America operations of ad agency Publicis, Blamer Partnership. Added Blamer, “agencies need “agencies need to change their cultures. It means shifting to justify their existence in the era of the new normal. If the focus to being makers versus being managers. Never an agency doesn't think that the client revenue objectives lose sight of what we do which is marrying creativity and are do-able, then it should resign the business. Agencies imagination with consumer insights. There are opportuni- need to quit whining and get on with it.” Store Shopping Patience Worn Thin Ad agencies should give a call to still-struggling The troops at struggling online company Yahoo Inc. department store chain J.C. Penney. Reason: the ouster have mixed emotions – sort of. Reason: the problems last week of JCP president Mike Francis after only eight YI is still facing and the presence of its interim ceo Ross months in the job. Francis considered responsible for the Levinsohn, who recently took over the top job follow- misguided advertising the company has been running and ing the resignation of Scott Thompson, who left after it the selection of the ad agencies responsible for it. became public that he had falsified his resume history. Francis, a Target Corp. alumnus, is said to have tap- “(YI) people are thinking positively about Ross, but ped Target’s former ad agency, Minneapolis, Mn.-based there are still a lot of folks looking for the door. They Peterson Milla Hooks, to work on JCP’s ads, and, as a have run out of patience. Good people have left, but you result, the ads were criticized for being too Target-like. will see even more leave, which will have a large im- “Creatively, (JCP) needs help. The (ads) are still bad and pact in terms of the general perception of (YI),” said one (JCP) is keeping an open-door,” an agency source said. cont. page 2 The Delaney Report © 2012 is published weekly, 48 times per year by Informed Communications, Inc., 131 Block House Road, Tryon, NC. 28782. 212/979-7881. Fax: 212/979-0691. [email protected]. Subscription: $595 per year. International: $612. Fax: $615. This is copyrighted material and any reproduction or retransmission without written permission is prohibited. Page 2 The Delaney Report Yahoo...cont. Making It Mine online industry executive. Added an online executive, Look for Kazuo Hirai, the new ceo at Japan-based “Yahoo is too powerful a platform to go away, but it entertainment and consumer electronics company Sony needs to develop a story for itself that makes sense. Does Corp., to continue to make management changes. Hirai it become more of a definitive portal. More about service is eager to put his imprint on the struggling company and less about content creation. An editorial filter on the and already has made a number of top-level management web.” Ross has other challenges. “He has to bring in shifts. SC, for example, appoints its motion pictures unit more good people who are not caught up in the valley head Michael Lynton as the new ceo of SC’s U.S.-based (Silicon) talk about how messed up (YI) is,” the source subsidiary Sony Corp. Of America, SC’s in-house coun- said. YI, last week, hires Google Inc. executive Michael sel Nicole Seligman is the new president of SCA, while Barrett to serve as its chief revenue officer. SC cfo Rob Wiesenthal is the new head of SCA interna- tional (appointments are effective this week). “You’ll see (Hirai) make other (management) changes. He wants his The Evolution own team on board with him,” a SC source said. Look for publishing/media companies Meredith Hirai is getting early support from the troops. “(SC) Corp., Hearst Corp., Conde Nast and Time Inc. to con- people like him. He has the skills to sort out the priori- tinue to transform themselves in a bid to move beyond re- ties. He’s Japanese, but he has been educated in the U.S. liance on print advertising. Meredith led the transforma- It’s not all about his ego. He listens and is putting the tion a few years ago with a series of acquisitions in the company before himself,” said another SC source. Hi- marketing services/data/media strategy areas (Hyperfac- rai's obvious challenge: getting SC’s various units around tory, etc.). Earlier this year, Hearst purchased a 50% the world working more synergistically. “The company stake in the global credit ratings/data analytics company is built on islands. It’s not just about getting the divisions Fitch Group. Conde Nast’s parent Advance Publica- speaking with one another; it's getting the silos within tions buys a stake in San Francisco-based software/mar- each division speaking to each other. None of them want keting company Unified after buying Fashion Network to play together. (Hirai) has to create an ecosystem that International (fashion blogs, etc.). And Time Inc., with says ‘I’m a Sony family member.’ With computers, with Bain Consultancy’s help, is now looking at where to go. TV, with music, with (video) games, and he has to put “They realize the core revenue streams they depend- it all together,” the source said. Added the source, “the ed on for decades are not coming back. They know they way to do it is to award (SC) executives incentives based now have to serve clients in new ways. The problem is on collaboration. People will chase the money.” that very often you don’t know what you’re getting into and these (acquisitions) can be a distraction – the risk is you lose your identity. And there are executional risks,” Unpopular said a publishing executive. Added a publishing source, Publicly-traded media company Viacom Inc. isn’t “you need to hire the right people. Experienced execu- winning any friends in the cable industry or any addition- tives from those worlds who know how to make the busi- al viewers to its cable networks. VI is headed by its ceo nesses work and know what you will be getting into.” Philippe Dauman, who answers to VI’s 89-year-old ma- jority owner Sumner Redstone. VI operates cablecaster MTV Networks, which includes MTV, Nickelodeon, Unpredictability VH1, BET and Comedy Central. VI is incurring the an- Ad agencies who sign on with clients owned by pri- ger of its cable competitors due to its negotiating tactics vate equity have their own kinds of problems. “Dealing during the latest “upfront” session (the period when TV with companies owned by private equity is particularly networks, cable and broadcast, negotiate with the ad com- frustrating.