BBDO Must Wean Itself From Branding Addiction in 2009

BBDO has taken more than its fair share of recession headlines recently as it announced layoffs of 189 staffers and the loss of its flagship Pepsi account. Salt is poured on the wound with this Ad Age report noting that BBDO will create “only” three Super Bowl spots this year. Folks who remain at the agency could be forgiven for asking themselves, what went wrong?

After all, this was the shop that went through a protracted and public effort to drag itself out of the TV age and into the 21st century, especially with its hiring of creative director David Lubars to “teach” the agency how to use the internet instead of the boob tube. So what must BBDO do to get it right in 2009?

First, it’s worth noting the commonalities between the major pieces of work the agency has recently lost. Pepsi, Best Buy, and Chrysler. (Yes, I know BBDO hasn’t lost Chrysler, but the reduction in Chrysler’s spend in 2009 will be similar to losing a decent-sized car account.) These accounts have reduced work at BBDO for differing reasons, but they all had one thing in common: They were big branding accounts.

Before she was made redundant, Chrysler CMO Deborah Wahl Meyer said she was no longer interested in branding:

That idea of bombarding consumers with GRPs to build top-of-mind awareness is, we think, a big waste of marketing dollars. The consumer process increasingly starts with a search engine. It’s accurate to say that ‘awareness’ is overrated.

Best Buy has chosen to focus on its Geek Squad customer service function (with Crispin, Porter & Bogusky) instead of its traditional branding.

And although we haven’t seen much of what Pepsi’s post-BBDO work looks like, I’m going to bet it will be more promotional than brand-oriented in nature. (UPDATE: Right on schedule, this video seeks to prove me wrong.)

The irony here is that while BBDO was focusing on changing its skill set from TV to the internet, its media-agnostic clients moved their interests from branding to sales-oriented promotional stuff.

What BBDO must do in 2009, therefore, is to drop its efforts to persuade clients to do gigantic, glitzy, brand-image campaigns. Instead, it should focus on sales-oriented promo work that has a direct effect at the retail level. One potential way forward for BBDO is to do more of the PR-oriented stunts such as the one that won it the Starbucks account — free coffee giveaways on special occasions, such as election day. (Note that such promos don’t have to be boring.)

Now that BBDO has Starbucks, the temptation will be to roll out some massive new brand image work. That would be a costly error. There’s nothing fundamentally wrong with Starbucks brand; and besides, the chain flourished for years without advertising. To up its major media spend would be to demonstrate that retaining BBDO is a waste of money. That temptation must be avoided. BBDO should concentrate on low-level, sales-effectiveness promotions. (Persuading the client to make the interior of Starbucks feel less cramped and smell a bit more like actual coffee would be a start.)

(For more on why branding is a loss-leader for big agencies these days check here and here.)

In terms of corporate strategy, BBDO might want to check out what Y&R Brands recently did with Danone in Paris. WPP acquired Danone’s customer relations management facilities and melded them into Y&R. Martin Sorrell knows that once Y&R controls all Danone’s CRM, it will be enormously difficult to “fire” the WPP shop.

Not helping BBDO is its Omnicom sister shop TBWA/Chiat/Day. That agency (which stole Pepsi from BBDO) is rolling a new campaign for McDonald’s coffee which directly targets Starbucks. The tagline is “Four bucks is dumb” (i.e. the price of coffee at Starbucks).

But that kind of tactical price war advertising is exactly the sort that BBDO needs to get good at, fast.