This month, the San Francisco-based agency Goodby, Silverstein & Partners turns 25 years old. For much of that time, it has boasted an award-winning TV reel, studded with cinematic gems for clients such as the Californian Milk Processor Board, Hewlett-Packard, Saturn, Porsche, Sony and Anheuser-Busch, among others.
So the co-founders and co-creative directors, Jeff Goodby and Rich Silverstein, could be forgiven for kicking back and enjoying the rewards that a quarter of a century in the ad business has given them.
Instead, these two entrepreneurs, followers of the Howard Gossage philosophy of rewarding audiences for watching ads, are more engaged than ever. They, along with the rest of their West Coast posse of partners, are reinventing the wheels that propel their particular brand of innovative creativity. And they've totally revolutionised their agency in the process.
Three years ago, the Omnicom-owned shop found itself being overtaken by some profound technological and digital changes that caused the partners to take a long, hard look at themselves. "People don't realise that we're not laid-back Californians, even though we might seem to be," Goodby says. "We're actually pretty competitive characters. We looked around and didn't see our names or work out there as much as we wanted them to be. Cab drivers weren't talking about us. Nor were our friends at parties."
Worse, other agencies such as Crispin Porter & Bogusky were getting a lot more attention.
Then Goodby read the comment of Intel's chief executive, Andy Grove, about how his biggest fear was that his company would become irrelevant - and he wouldn't even know it. "There was something about that statement that scared us," Goodby says.
"I had a doomsday feeling about what people were writing and saying about us."
"Relevance" became their de facto mantra, and they began hiring people with different skill-sets to reformulate an agency mix that was 80 per cent TV and only 20 per cent digital. To help shake things up, in early 2006, they hired Derek Robson, a former managing director at Bartle Bogle Hegarty in London, who had a background in planning.
According to Robson: "Here was one of the great creative agencies asking some profound questions about the future of advertising. Rich and Jeff were very serious about changing the agency."
Robson spent months talking to journalists, consultants and people outside the business, in effect becoming the planner on GS&P. And while there was a lot of opinion, there were few hard, cold facts. He discovered the agency was perceived as being fairly traditional. "We looked like either an agency that was completely locked in the past, or an agency that was so arrogant that it didn't even feel like it had to present itself," he says.
It was a surprise to say the least. "The consultants thought we were arrogant and didn't work as hard as other agencies to show different kinds of media capabilities," Goodby says. "We'd send a TV reel and a letter that more or less said: 'Well, you know who we are.' I work hard to have everyone understand that we should be humble and surprise people with our humanity, sense of humour and perspective. So this came as a shock."
It proved the catalyst for enormous change. Robson produced what he calls a pile of "boring, tedious analysis" on the agency's strengths and weaknesses. "I became the statistics person obsessed by facts; because the way to convince the press, the industry and cynical people is just to be really, really factual," he says.
According to Goodby: "He numerically lined up the kind of work we were doing vis-a-vis the kind of people that we had." And while clients were asking for more and more digital work, the agency hadn't staffed for it. Some staff left, and were replaced with more "Swiss Army knife creative types", according to Robson.
He also combined the media department with account planning, creating a new strategy department, and hired a PR company. It was a big step. "We were still getting press, but about TV. As far as we were concerned, it was no longer good enough to have a great reel. We had to demonstrate that we could do much more," says Robson.
Then, in January of 2007, key client Saturn left, a $190 million loss that could have been a huge blow involving mass lay-offs. But the newly retooled agency began pitching like crazy, and within months had reeled in the likes of Sprint, with $1.2 billion in media spending, the car-maker Hyundai, with $600 million, as well as the National Basketball Association and the Commonwealth Bank of Australia.
By the end of 2007, the agency had won some $2 billion in new billings, increased revenue by 14 per cent and added more than 200 new employees. Moreover, some 60 per cent of creative employees now worked in all media, up from 31 per cent previously. Plus, they began producing far more non-traditional advertising than ever before, until the TV versus digital mix balanced out at 50:50.
"Sprint and Hyundai initially asked us to just develop advertising and in both cases our relationship became much more than just advertising," Robson says.
According to Russel Wohlwerth, a partner at Ark Advisors, a consultancy that manages account reviews: "For an agency with over $500 million in billings to change themselves is extraordinary. Goodby made some fundamental changes that most agencies are unwilling to make. It's at the top of its game and it's proving that, yes, you can change. You don't have to be a victim of who you were. It has a great success story. It has a unique combination of strengths we don't often see."
Among Goodby's long-running success stories is HP, for which the agency created the extremely successful "the computer is personal again" campaign. It helped to catapult the company to become a market leader in PCs.
David Roman, HP's vice-president worldwide marketing communications, Personal Systems Group, says: "It has done remarkably well. As a structure, Goodby's is different from most agencies. Most have chosen to have a huge network of agencies, and if they want to produce a website, they affiliate themselves with, or buy, a web company. Goodby expands organically within the agency, and all the expertise is in-house. This made a big difference for us as a client, because we want to be integrated in everything we do."
Coming off one of its most successful years ever, what's next for the agency? "We always have the same hopes: to make our work better than last year," Goodby says. "There's a lot of room for improvement. We grew so much last year that we need to deal with those challenges. I don't think the work is as great as it could be."
Not that the agency plans on turning away new business, especially from the digital sector. "We've just been hired by Budweiser, for instance, to work exclusively on Bud Light's digital profile," Goodby adds. "I'd say digital is our biggest attraction right now."
Roman points out: "HP is very much into new media, and, at my group, we've moved some campaigns to 70 per cent online and 30 per cent traditional media, and it's going more and more online. Having an agency that actually looks at it entirely as one creative challenge is much more convenient than having an agency that has different centres of expertise with different companies. The more it grows, the more it's adding new types of expertise to its business, which is how it addresses the growing needs of its clients. It's grown with us, and we like that."
The agency is also focused on the next frontier: content. "Our version is: can we start some businesses that would involve using our skills and take some seed money?" Goodby explains. "We're exploring some media ideas and we've had conversations with venture capitalists about where businesses are going and what they're investing and spending their time on."
And they don't totally rule out overseas expansion. "There hasn't been a real financial need to do it," Goodby contends. "We're protective of our own ability to manage this one unit well. I think that's what's kept us from doing it."
Today, the Goodby ad mix is traditional 46 per cent, and digital 54 per cent. "We don't want to come to work and be irrelevant. We want to make things that people notice and talk about," Goodby says. "Without this revolution, we wouldn't have been doing that."
As for that other agency, to whom it is still compared, according to Robson: "We no longer talk about Crispin. We respect and admire it, but we don't worry so much about the outside world in that regard anymore."