Keith Reinhard is the Chief Executive Officer of DDB Needham, USA. Created a little over a year ago by the merger of Doyle Dane Bernbach and the Needham agency (both respected advertising agencies). DDB Needham currently has billings of nearly $2 billion, and is ranked as the eighth largest agency in the world. Keith Reinhard started his career as a copywriter with Needham, and as a veteran of the American advertising industry, is uniquely positioned to talk about the creative process, managing a people-oriented business, the global restructuring of advertising, and contemporary trends.
Vinita Bali, Marketing Manager of Hindustan Cocoa Products Ltd, was in New York recently, and interviewed Reinhard. Excerpts:
How would you describe the personality profile of DDB Needham? In other words, what do you think sets it apart from other advertising agencies?
A good question. Every agency is probably has within it a charter or a statement that commits it to creativity. We certainly do too. But we believe that we’re unusually well positioned to deliver on that commitment. Doyle Dane Bernbach certainly had an undeniable heritage of creativity. And by the time of the merger in ’86, the Needham agency was winning lots of awards… I think it’s one thing to make a commitment to do outstanding creative work, and it’s another thing to have the credentials and the heritage and tradition of doing that… we don’t have to evolve an organization or reshape it to understand that creativity is of the highest importance. People already know that. The personality of the agency is still emerging because we’re only one year old, but the personality that we aspire to be could be descried as surprising, passionate, and humane. We place a high priority on the importance of surprise in advertising. We are passionate about our work, but we are also try to be very humane, and this humanity we believe should express itself within our organization and people working with each other, and also with our clients, and finally and most importantly, to the people who see and hear our advertising… there should be a great respect for them.
Advertising- more so than most other businesses – is very people- oriented. What do you do within the agency to keep the motivation and energy levels of people going?
You have to have goals and objectives which everyone can identify with, and which are important to everyone. If people can feel psychic ownership, then they feel better about coming to work. So if you begin by saying that creativity is not the province of the creative department alone, but is everybody’s job, then suddenly you have created ownership beyond just one department. It becomes a new concept where everyone on the team has the same goal – to get to the end of the field and score. Each has a different role to play, but nonetheless teamwork is the way to instil morale and motivation. And we have found in studies of various kinds that when you talk about morale, teamwork is the single highest factor in determining whether people feel good about the company – and if they feel that, they are part of the team. So we are very specific and say that creativity is for everybody... We have devised a system that is in place everywhere in the world, and which we are proud of, an approach we call planning for ROI. This means returns on investment to most clients, but to us it also means Relevance, Originality, and Impact… When you think about it, you cannot have relevance unless you involve research to fuel the creative process… so that you know what is truly relevant. And originality perhaps is mostly the province of the creative department, and yet we believe that our strategies must start with thinking: what is original about this promise? And for impact, you must have the media involved. So you can’t really execute our system unless you have all the disciplines involved.
What about the role of the account management team?
Well, the account executive is the generalist, who must do three things. First: manage the relationships within the agency and the client. Second: make sure that all our resources are mobilized for the right ideas. Third: know how to sell high profile ideas to clients who might be expected to resist the unusual. Know what the client wants, know what the client needs, know how to make the client want what the client needs. We reject the notion that account executives are the go-between, between the client and the agency. We say that they are the captain of our team.
What kind of training inputs do you provide to the people working for you? Is there a programme the agency has for developing people once they’ve joined you?
We have institutionalized a programme called DDB Needham University. It is chartered to indoctrinate key people around the world in the fundamentals of the DDB Needham approach, planning for ROI. We are currently having a session in New York, this time with media people from all around the DDB Needham world, instructing them into the media parts of ROI. Concepts such as aperture, for example, which suggest that I can sell you something to eat more easily at 11 o’clock than at 2 o’clock. That’s simplistic, but it says that media can help to find the time and place when the responsiveness to the message is the most. That’s one of a series of media fundamentals that we believe will make us unique because of our insistence that media is our other creative department. It is execution, and to the extent that it can be involved at the beginning and throughout, we will have an edge on our competitors because we can make a small budget go three or four times as far.
DDB Needham is now a year old, as you said. What were the major challenges in combining two different corporate cultures into one… two different creative styles, different media departments?
In terms of creative style, the difference was more perception than truth. In reality the styles were not much different. We were absolutely together from the start on the importance of the creative product. We were also quite agreed on the importance of the individual, the worth and contribution of each individual. Where we were apart was the business of teamwork… that was the biggest difference. We believe in this day and age that you have to work as a team. As products become more and more similar to each other, as it becomes more and more and difficult to build strong brands in the marketplace, then one must be more concerned withthe brand’s total communication. All the voices must be orchestrated. You have to work as a team… public relations, direct marketing, event marketing, media… they must all be associated. It’s a marketplace necessity. The old way of everybody having his own turf, and research not being allowed to be in the creative meeting… people were afraid that the creative players would be weakened or dissipated if we had a team concept. Not so.
Mergers and acquisitions - both by clients and agencies - perhaps introduce some uncertainties in the client-agency relationship in terms of changing portfolios of clients or agencies depending upon whether you’re handling competing business. How is this best managed by the industry - at the client end as well as at the agency end?
Uncertainties? The destabilising effects are undeniable. The whole industry in this country - and I believe round the world - is going through a consolidation period. It’s a direct reflection of the corporate sector. When you have companies like IBM making statements that they would like to go from 70 agencies to 3, then you know that 67 agencies are going to be in trouble. And clearly the trend that led us to merger was that more and more clients wanted more effective advertising, in more places around the world, from fewer agencies, at less cost…One client says, I need a strong European network. The next client will say, I don’t need a European network, but I need strength all through Asia/Pacific. You put them all together and you have a requirement that says: I need to be in more places, I need to find ways to be there more efficiently, and I need to find ways to get a better product or better service, at lower cost…when the corporate sector goes through mergers and acquisitions, they sometimes believe there are conflicts involved. We lost a very good piece of business from G.D Searle because it was taken over by Procter and Gamble. We were doing wonderful advertising, and had some very good product successes, but in their minds, it’s a conflict. What can I do about that? It’s the client’s decision. I believe that we will see a time when a much more intelligent approach will be taken. I could suggest that all a client really should concern himself with is, one: am I getting the best advertising I can get for my money, and two: am I sure that there are no breaches of confidence? Once they understand that, and once we can convince them of that, then I think we’ll have a much more liberal interpretation of conflict.
What were the other forces that have led to the restructuring in the advertising business?
Well, in this country we have been used to 15% inflation, and to some extent, 15% agency commissions, and with this combination of 15%, you could build big fat agencies, and it was all hidden by the inflationary growth. Now we have the disappearance of the 15% commission, and we have disinflation, and all of a sudden we have to ask: wait a minute, do we really need all these things that we allowed to build up, in the name of client service? That’s traumatic. Then we have unprecedented pressure from clients on revenues and profits. And so we have to restructure ourselves as an industry, and rethink our pricing policies…Another thing that’s happened at the same time is the media explosion. In this country, it takes a stack of papers an eighth of an inch thick to negotiate an $8 million network deal. To negotiate an $8 million cable deal, it takes much more. Now, on the network deal, I can make a little money. But it may be in the best interest of the client to go for the cable. And so the media explosion is another traumatising event, because we didn’t have to worry about that before all this proliferation.
Event sponsorship is becoming increasingly popular, at least in this country. What is the role of sponsorship of sports and other events in the overall marketing mix?
I think it is an increasingly important role for some product categories. For example, take our own situation with Anheuser Busch, a major brewing company in the United States. We have decided to pre-empt rock and roll music for Michelob. It’s an important pre-emption, because the target audience is consistent with our strategy. Michelob was an old brand, becoming very unspecial losing its franchise. We needed young people to come to the brand. And so, rock and roll music. We negotiated with Phil Collins and Genesis. He makes commercials, then we hire him to do a concert tour, and he plays our commercials at the concert. Michelob signs are all over, Michelob videos, product commercials playing…Pretty soon, people hear a Phil Collins recording, or Genesis, and they think they’re hearing a Michelob commercial…It’s wonderful synergy. At every place he goes, round the world on his tour, Michelob is part of the event. It’s impossible to calculate the real impact that has, but we hope that it is turning the brand around. That’s a good example of event marketing. It’s much further along in the area of sports…At the Needham agency, we came up with an idea for Xerox’s new line of copiers. We said we’ll call these copiers, “Marathon”, a sport which enjoys popularity in every country of the world, not like basketball or baseball. It also relates to this machines’ ability to run, run, run, and run…the idea was relevant, original, and it had a certain amount of impact, the way we did it. The next step was to sponsor marathon runners in various competitions around the world, and then finally to sponsor marathons - or rather one-tenths of marathons - among business corporations in the US. Xerox salesmen would sponsor the Xerox marathon, and get potential customers for Xerox to come and run against each other. They had ten runners on each team, so it was more like a relay. It generated a lot of excitement, always reminding people of the Marathon copiers...Every television camera that ever shoots any of this stuff sees Xerox. We pass out raincoats if it rains, and there are television cameras on the raincoats, and Xerox all over the pockets…
What do you consider to be the social responsibility of advertising?
I’m not sure if one would agree with this, but it seems to me that we do have a responsibility to the public, not only to the bottom line. We need to make a contribution to the culture and we need to get rich in society in ways beyond the bottom line. And that’s why I think that we must have relevance, originality, and impact in our advertising - we owe that to the client. Beyond that though we could have something very relevant, and very original, with a lot of impact that somehow was very abrasive, offensive, in bad taste - although it’s hard to argue taste. We would say that’s not for us. We would insist that all our work respect its audience…And then beyond that, I believe that people deserve to be rewarded with advertising, and that they like to pick up its snappy slogans and sing its jingles. I don’t mean to be demeaning, but there are a lot of people who cannot get to the concerts and the museums and the stage shows. And so I believe that we have an artistic obligation towards society that pays so much money for our products and services.
One last question. A lot of the US agencies have been in India for a long time, and some have just finalised arrangements with advertising agencies in India. Has DDB Needham ever considered entering India or establishing a base in India?
It is not our top priority at this time, but we have a committee of the board which is examining when and under what conditions and with whom we should consider venturing into India, China and Latin America.