Three Los Angeles advertising executives David Smith, Brett Craig and Russel Wohlwerth met at the Business Journal to comment on the evolution of their industry. Each brought years of experience to the discussion, and found some common ground although they came from opposite corners of the business. Smith works for an independent L.A. agency, RPA; Craig, for a massive conglomerate, TBWAChiatDay; and Wohlwerth is at a consulting firm, Ark Advisors.
Question: Is advertising as important to the local economy here compared with New York or Chicago?
Wohlwerth: It’s definitely more important to New York and less important to Chicago. Here you’ve got TBWAChiatDay with billings of $1.5 billion, you’ve got Deutsch at more than $1 billion and you’ve got RPA at over $1 billion. That’s $3 billion from three agencies. In the past, we never had agencies that big. We used to have branch offices of the big New York agencies.
Q: When you get together for local industry events, do you have more or fewer people than in previous years?
Craig: The one measure I have is the Belding Awards show. They used to have some significance, a badge of honor. There were a thousand people with a full sit-down dinner. And now it’s still a nice show, but I don’t know if anybody cares anymore. The prestige of Cannes Lions advertising awards has grown.
Q: What does that say about the industry?
Smith: All local shows are struggling because the national and international shows have become so meaningful. That’s where agencies want to compete.
Craig: When we were smaller, there was more of a sense of brotherhood.
Q: How has the digital revolution affected you?
Craig: At ChiatDay, the digital department used to be a doghouse. Now we have some of the best ideas coming out of digital and trickling to traditional media.
Q: Is that happening everywhere or just in L.A.?
Craig: It’s happening here as fast as anywhere.
Smith: The top markets are all moving at the same speed. You drop down to the second tier, you’ll see a difference.
Wohlwerth: It’s everywhere. Digitas out of Boston is probably the best digital agency in the country. Atlanta and San Francisco have some hot agencies.
Q: Would you say Los Angeles is ahead of the pack in the digital race?
Wohlwerth: I don’t think Los Angeles is ahead, I don’t think there is a digital center. Atlanta, Dallas, Chicago, San Francisco, Seattle, Portland, Austin it’s all over the place. The place where we do better is the entertainment aspect. Creative Artists Agency has a marketing operation that’s like an agency within CAA, but it doesn’t just use their clients.
Q: What does it market?
Wohlwerth: I like to call it a marketing firm without borders. It has a marketing group that operates unlike any ad agency I’ve ever seen. They could only do that in Los Angeles, because it works with marketers trying to figure out how align popular culture with their brand. This popular culture we have is an ace in the hole.
Q: Do they compete for business with agencies?
Wohlwerth: Usually they don’t replace agencies, they just add another layer.
Smith: But they are competitors. We also see it happening on the digital side. Some companies grew up tracking data, but now they create advertising. Their background is in data analysis, and now they’re a marketing group.
Q: What else in the L.A. culture makes its way into advertising?
Craig: I think diversity is an advantage, too. The potpourri of cultures means we’ll never have one way of thinking in L.A. You can drive across the city and see every walk of life, every socio-economic background. That’s a strength.
Wohlwerth: In Boston, when I tried to convince a major client to do Hispanic B2B advertising, they said, “Those people don’t have businesses.” I said, “What, are you nuts?” It was a whole different perspective. The whole country is a melting pot, but in L.A. even more so.
Q: A few years ago, big conglomerates were buying up ad agencies all over the place. Has that changed the culture?
Wohlwerth: It used to be you worked for either a big shop or a small shop, and the small shops were crummy. But when those big shops bought everything, they fired a lot of people and they had to go somewhere. Now the small startup agencies have a lot of star power. Look what Dick Sittig has done with Secret Weapon Marketing, maybe 10 to 15 people. Now the small shops do project work for the big brands.
Craig: I don’t know about all the holding companies, but TBWA has left us alone. They wanted ChiatDay, they didn’t want us to become like the office in Germany.
Wohlwerth: Omnicom (which owns TBWA) is good that way. I can’t say that for the other holding companies. Sure, Omnicom has profit margins but they let the agencies runs their own way.
Craig: There are core tenets we all buy into, but after that, they let us maintain our Los Angeles culture. At ChiatDay, there’s a picture of a giant surfer riding a wave when you walk in the door. They definitely left that alone.
Wohlwerth: But I go into TBWA offices all over the world, and there’s a definite spirit. No surfers, but it feels very real. Then there are the independents like RPA that play to their own beat and answer to no one.
Q: How about the evolution of an L.A. style of advertising?
Wohlwerth: I don’t really think there is a unique Los Angeles style of advertising, but there used to be. I got into this business in 1979, and there was definitely a New York school of advertising. The West Coast was just coming into its own with TBWA and the signature work for Nike and Apple. That defined the L.A. style, which was not so uptight, almost smarmy and carefree, throwing tradition to the wind.
Smith: Ten or 15 years ago, there was a difference in how L.A. approached advertising. Others have taken the L.A. style and made it their own. What made it different is that it was less an argument for a product and gave less rational reasons to buy. It was more evocative and visually driven than campaigns from the East Coast. L.A. came at it differently by creating work that made people feel something rather than convincing them.
Q: How was the Nike campaign different?
Wohlwerth: It was 1984 and the Nike ad where they were throwing the football across the freeway from one outdoor sign to the other, that was really groundbreaking. L.A. was really coming into its own right before the Olympics not just Hollywood, but L.A. as a destination. That showed the maturity and the ethos of what was going on in the market.
Q: Other examples?
Smith: The California Cooler stuff really had an L.A. vibe. It was another Chiat campaign that showed how these surfers would make their homemade wine coolers on the beach. They would all bring fruit juices and a bucket. Even the music was great; it gave you the feeling this was a cool product rather than telling about its attributes.
Wohlwerth: It was as far away as you could get from the arrows going up the nose, which was the old packaged-goods school of advertising. The Procter & Gamble rules said: Set out the product benefit in the first 10 seconds of the spot, then demonstrate the benefit and close with five to seven seconds of the logo. It was total disregard for those rules.
Q: California Cooler had a natural Los Angeles connection. Did the style work for more traditional products?
Wohlwerth: Switching categories, there’s Carl’s Jr. and the Jack-in-the-Box campaign by Dick Sittig at Secret Weapon Marketing. Now everybody tries to go after that fast-feeder adolescent guy, but they’re aping the look and feel of those ads.
Smith: The AMPM campaign really foresaw that trend. I think that’s another difference between L.A. and other parts of the country. When we worked on that campaign, 7-Eleven and the other big convenience store chains were taking a rational approach. The pitch was, “If you need something fast, get it here.” But our research showed that’s not how people were using those stores. People went in and bought as much junk as they could, usually consuming it before they left the parking lot. No one had ever talked to those guys quite that way, so we did. It was a smashing success.
Q: Has the L.A. style become adopted all over?
Smith: I wouldn’t say it has taken over. I would say it’s now a big part of the mix. Others are using it because it works in the marketplace. At the end of the day, looking rationally at sales and tracking studies of brands, the data show that type of connection with consumers will “move the needle,” as they say.
Wohlwerth: Today the center of advertising has become so dispersed. I work with agencies all over the country Minneapolis, Atlanta. Advertising has become dispersed and so has any type of house style.
Q: Does the L.A. lifestyle appear in ads?
Smith: Well, if you look at the Honda Accord work back in the ’80s, we showed a picture of a car hanging on a museum wall. A guy gets in the car and drives it off the wall. In that category, nothing had been done like that before.
Craig: Aside from Volkswagen, the best car advertising is done in Los Angeles.
Q: Because we’re a car culture?
Wohlwerth: I think so. New Yorkers can’t relate. In New York, you use the car on weekends. Here, it’s your life. We understand what a car means to a person, and the rest of the country looks to Southern California for car culture, whether it’s design, aftermarket parts or advertising.
Smith: L.A. was the first to say, “This is how a car can make you feel.”
Q: How has proximity to the film and entertainment industry affected L.A. advertising?
Craig: It’s odd that the studios don’t utilize agencies.
Q: Why don’t they?
Smith: We talked about how New York uses a formulaic approach to advertising. I think the studios have fallen into a formulaic approach to marketing their films. They seem to measure, based on the trailers they cut, how the products will perform. It may not be completely scientific, but there’s not much room for the creativity an agency would bring to the party.
Wohlwerth: Because they’re in the entertainment business, they think they know everything. So they don’t use ad agencies. They are huge purchasers of media, so they use the media-buying services. And there are a million production houses that specialize in cutting trailers. They have number-based research on what elements work.
Smith: I would draw a line between the film studios and TV. Some of the networks and cable channels have done fabulous work.
Craig: When ChiatDay worked for ABC, it was really provocative. Those yellow signs did a great job building awareness for ABC.
Q: But in general, their approach is that they’ve already done the creative work.
Wohlwerth: And they are more creative than you’ll ever be.
Craig: The same is true at video game companies. They do their own ads in-house.
Q: Final question: What does the future hold for L.A. advertising?
Smith: More of everything. More agencies, more specialists, more generalists. So much discussion now focuses on media being the message. Right now they’re relying on media more than ideas. We’ll see a return to the idea, no matter what canvas you’re working on. I see L.A. perfectly positioned in terms of location and business for a great run here in the next five years.
Wohlwerth: In regard to the future, our entertainment heritage will come home to roost, resulting in real growth for the industry. There are a lot of new agencies out here that reflect this merging of entertainment, popular culture and technology. This is an ideal breeding ground. We’re attracting some young hot agencies to L.A. that we haven’t seen for awhile. Our royalty is celebrities and this is the entertainment capital of the world, so it makes sense entertainment would be the driver for society.
Russel Wohlwerth
Principal, Ark Advisors LLC
When corporations put their advertising business “for review,” meaning agencies compete to win a contract, Wohlwerth handles the process. He has managed reviews for BMW, Hallmark, Intel, Microsoft, Porsche, Sony, Wells Fargo and Visa. From his office in Playa del Rey, Wohlwerth visits about 300 agencies per year around the world. Last year, he spent time in China for brands that were recruiting local agencies for the Olympics. Prior to his consulting career, he worked as a copywriter and account manager at McCann-Erickson and DDB.
David Smith
Executive Creative Director, RPA Inc.
An 18-year veteran of RPA formerly Rubin Postaer & Associates in Santa Monica, Smith oversees campaigns for such clients as American Honda, La-Z-Boy, Pentax and Mandalay Bay Resort & Casino. In the past, he’s worked on accounts for the Disney Channel, VH1, California Pizza Kitchen, Arco’s AMPM convenience stores, Pioneer Electronics and Blue Cross. RPA creates integrated campaigns through television, print, online and event marketing. It ranks No. 1 on the Business Journal’s annual list of L.A.-based agencies, with annual billings of $1.1 billion.
Brett Craig
Creative Director, TBWAChiatDay
Almost a decade ago, Craig wrote the “Falling Star” campaign that launched XM Satellite Radio. Then he spent seven years on Sony PlayStation products, overseeing the launch of the PSP handheld platform and PlayStation 3. Now he manages the new “Whoo Hoo” campaign for Washington Mutual. He has also worked on the Energizer, Nissan, Taco Bell and Apple accounts. TBWAChiatDay specializes in “disruption” advertising, meaning the message must contradict conventions to stand out. The agency is part of New York-based Omnicon Group.
