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2008 Leadership Conference, Address by Tom Carroll, Incoming AAAA Chairman 

As I was coming here yesterday, I was wondering: who was the jerk who said that we should move these meetings from places like Laguna Niguel and put them in places like San Francisco or some cities? Who is that jerk who said that? I’ll take responsibility for that. Let’s do it every other year – we’ll go to a city and then we’ll go to some place like this. It’ll be nice.

The Leadership Conference has taken its fair share of criticism in the past few years, some of it deserved, some of it just piling on. Basically, the membership got together last year and said: “You know what? We need to disrupt this thing and change it, and we fundamentally need to change the way we go about it.” So that’s what we did. This agenda is a first start at trying to do something different. We might get pieces of it right or we might not. The only way it’s going to get better is if we get feedback from all of the membership and people stay involved, and that’s what this attempt is. We really want to do news-you-can-use: much shorter, much faster stuff, issues facing the industry, and stuff from outside the industry. I’m not interested in hearing from other agency people and I know that you’re not interested in hearing from me, so I’m going to be very brief. How do we get this conference to be more inspirational and more insightful? That’s really the agenda and the objective of what we did.

So, it’s the Leadership Conference for CEOs. We need leaders here. Next year, hopefully, we’ll have more leaders. And it isn’t just management CEOs – it’s leaders. Who’s driving the business, whether that’s media, creative – it doesn’t matter. If you’re a leader in the industry, we need to hear from you, or if you’re a leader outside of the industry who’s driving our industry, we need to hear from you. So that’s what the objective has been, and that’s the criteria for speaking.

I like this quote that my buddy Colleen DeCourcy [Chief Digital Officer, TBWA Worldwide] has on her wall. I love Hunter Thompson and it’s from his Great Shark Hunt: “I have not read ‘The Myth of the Sisyphus’ for a while, but if memory serves there is nothing in that story to indicate that the poor bugger ever gave any thought to the real nature or specific gravity of that rock that would eventually roll back on him – which is understandable, perhaps, because when you’re locked into that kind of do-or-die gig, you keep pushing and ask questions later. If any of the six hundred valiant fools who rode in The Charge of the Light Brigade had any doubts about what they were doing, they kept it to themselves. There is no room in Crusades, especially at the command level, for people who ask ‘Why?’ Neither Sisyphus nor the commander of the Light Brigade had the time or any real inclination to question what they were doing. They were Good Soldiers, True Believers… and when the orders came down from above they did what had to be done: Execute.”

And I think that is basically what we’re in the middle of right now in our industry. The criticism has been that we talk about what’s wrong with our industry and how poorly we’re being treated – enough. I think it’s changing; the momentum’s swung in a different direction and we’re on a better foot now. We were on our heels for years, and we’re not on our heels anymore, but it’s all about execution. And that’s the only thing that matters in our industry – execution.

I had the good fortune of working for Jay Chiat for a long time, and he had a painting by a modern artist over his mantle that said, “That was then; this is now.” And it was kind of how Jay lived his life. Jay had a lot of guts and he always knew when to change. Sometimes he was right, sometimes he was wrong, but he never whined. He always pushed everybody forward. You’d walk into his house and you’d see this painting and it was how he lived his life. And I think it’s a nice thought for us. That was then; this is now. It’s moved in our direction. We should just stop talking about what was and what wasn’t good, and start talking about all the good stuff that’s going on. That’s what we’re going to see a lot this week.

So, where are we? I think that we’re in a couple of places. One, it’s an uncertain economy. Somebody said to me the other day that it’s like driving in the fog: you’re not sure what’s in front of you, but you have to keep driving, and you have to look for turns and corners. And it is like driving in the fog, but the truth is that we haven’t slowed down and we’re doing better than we’ve ever done. More and more, you see that we’re dealing with all of the issues facing the industry. And I don’t know about you, but I’m sure you’re all experiencing the same thing – clients need us now more than ever. We have this unique role that we play in our clients’ businesses because we cross so many industries and we see so many things. Clients like nothing more than to hear about other clients and how they’re dealing with things or other categories and how they’re addressing things. We have a unique position right now in this economy where we can help our clients, and I think that we should just realize that, and jump on that, and use that.

The second thing is that we have to get our confidence back – I think we do have our confidence back – and we have to stop listening to the critics. It’s very easy to criticize our industry. There’s no shortage of people who say, “Well, the agencies just don’t get it.” Well, guess what? You just don’t get it; we do get it. And we’re dealing with the issues every day, and every day you can see tangible proof in executions, in the way we’re turning brands around, and in the way we’re dealing with the current environment. So, you can listen to the critics, but I can’t read another article saying, “Well the industry just doesn’t get it,” with no specifics, just people throwing mud on our industry. Enough. Number one, you’re not in the middle of it, so I don’t care what you say. Number two, if you got in the middle of it, and you were living it every day, you’d see that we do get it.

Another thing is that it’s moving very fast. We always read about how it’s just like when the TV came in, when the television commercials came in, and the industry was changing. I don’t think that it’s anything like that. It’s twice as fast, twice as interesting, twice as complex, and there are far more requirements on us than ever before. It’s kind of like the television – it’s a change – but fundamentally it’s much faster, much more intense, and it requires much more of an effort from all of us. But I think that it’s a good effort, and we’re seeing it more and more every day. All of the big agencies are doing it. If you look at a lot of clients – if we ever gave him a chance to speak at one of these conferences, Eric Keshin from Interpublic would be telling you, too – our clients are turning to us. If you look at the most sophisticated marketers, they’re coming to us and they’re saying, “You take it from top to bottom. You’re our brand stewards. Before we thought it was going to be broken up – we’ll have an interactive agency over here; we’ll have a digital agency over here; we’ll have a PR over here.” They’re coming back to the agencies and they’re saying, “You know what? You have to lead us. You do it; we can’t do it. We thought we could do it, but the truth is that’s what you guys do. You’re the ones who write the stories; you’re the ones who have the insights; you’re the ones who do the execution; you take it over and you run it.” If you read the press, if you read the account switches, and if you read the stories from the most sophisticated, you’ll see that the clients who need and appreciate our business the most are handing everything over to the agencies and saying, “You take it. You lead us.”

People were talking about our demise. We were going to be appendages to the media companies or we were going to be in-house creative departments to our clients. That didn’t happen. It reminds me of when the dot-com era came and one of those dot-com agency guys came to my office and said, “You know, you’re going to be working for me one day. All you big agencies are going to be working for the dot-com agencies.” As I was chasing him out of my office, trying to put my foot in his ass, I realized, I’m not going to work for you – you’re going to work for me. He doesn’t work for me, but he works for one of my friends. So, they do. It’s the same thing – it’s just another cycle in our industry, but we’re back on top. And our clients are giving us the ball back, and we have it, and we’re delivering. You can see it everywhere. We’re delivering it digitally, we’re delivering it online, and we’re dealing with these complex issues that we have.

What are the issues that we’re facing? The first one’s digital. Can we make a deal? It’s all digital. I can’t have another meeting or go into another room where we talk about the ads, but then, “What about digital?” It’s all digital. Remember twenty-five years ago – I’m old – you used to start with a brochure and everything would emanate out from there. Now you start from a website, and that’s digital. Everything we do is digital. Our whole industry is digital now; it’s one thing. Brands have to touch people. Some of it’s more digitally oriented, but at the end of the day, it’s all digital. And it’s data – it’s data and it’s delivery. We’ve always done data and delivery, and we’ve always delivered through some sort of medium, and we’ve always dealt with data. Remember when some guy would come into your office and say, “Well, I’ve combined MRI with Simmons and cross-tabbed it with sales, and I looked at some DMA and came up with this idea…” It’s data. It’s the same thing. This isn’t astrophysics; it’s not that complicated. It’s data and we know data, we understand data. So the next time somebody comes in and says, “Well, you guys don’t understand data” – that’s bull, we do understand data, we know how to play with it, we know how to work with it, and we know how to find the people who know how to deal with it. I don’t know if you’re experiencing it, but inside the agency, just inside my agency, in the language alone and in the common vocabulary, it’s all data.

The second thing is technology. Again, if you read all of these articles – you know, “you’re not using the technology” – yes, we are. We understand mobile; we understand the web; we understand how kids play; we understand all of it. We’re all dealing with it every day. And every day, more and more, we see that execution out in the marketplace. And it’s all tangible proof – you can see it, you can read it. What I like about what we’re seeing in Ad Age and Adweek and the Times and the Journal and all of the publications is that more and more of the articles are about execution. Some are small, little things where about twelve hundred people visit the site and it’s the newest, biggest thing, but at least it’s about execution. We’re in an execution phase in terms of what we’re talking about. We get technology. And I think that’s another thing – get on our toes. We know what we’re doing with technology.

The next thing is that we create. What I mean by that is we create stuff. I don’t mean it as, “We’re creative and everyone can kiss our ass because we’re the creative people.” What I mean is that we create a lot of different things and nobody’s coming behind us to steal it from us. Again, we approach the “digital people” like Bush with Al Qaeda – you know, they’re all waiting around in Kansas to kill us. It’s like there’s some boat off the coast with a bunch of digital people and any day now they’re going to knock on Tony’s door: “Hi, we’re the digital people and you no longer have a job.” And they’re all young, by the way, and they’re going to eat your young. God, stop! There are always going to be new agencies, there are always going to be AKQAs, somebody’s always going to die, some agencies are going to go away, and some agencies are going to last. Our industry has always been about the same thing: it’s about talent. It’s about money, it’s about recognition, and it’s about talent. And for most people, that talent is going to come to where the big brands are, where the opportunities are. So, everybody can start writing about our demise again, but it’s just not going to happen. It’s all migrating our way already. A lot of the people who are playing out there, saying, “Well, maybe I ought to wait because I’m going to be one of those digital guys who kill all the big guys” – a lot of that’s moving in towards our direction. Lots of people are playing together. So, it’s here, and we’re all doing it, and we’re handling it. I’m tired of the baloney.

There’s another point, which is that creativity is receptivity. I had this great client – his name was Leonard Vickers. He used to work at BBDO and then he worked at GE, and he had this great line: “Creativity is Receptivity.” We’re still the industry of insight. We’re still the guys who know how to deal with the data, then take that data, and come up with really smart ways of talking about that data and strategies for that data. There are still brilliant and insightful people in our industry, who get to hand it over to creative people, who get to execute it and torture us, but we’re still the place where smart people want to come and have insight. So we have more going for us than ever.

The ANA. I love what Bob Liodice and Jim Stengel and those guys did with the ANA. Five years ago, it was a 250-person bore-fest. I mean, nobody went to it, and there was no reason to go. They just re-did it. But if you go to the ANA – and you’re stupid if you don’t go to the ANA, since all of your clients are there and you have to go to the ANA – now it’s a 1200, 1400 must-see conference that you have to go to. Ninety percent of the content of the ANA is stuff that you guys created. Our clients paid for it, so they deserve to stand up with the agency partners and talk about it, but ninety percent of that conference and the content in that conference is stuff that was created by the people in this room, right here, and our companies. I applaud the conference – I think it’s fantastic. And you go to the media conference and that’s 1400 people. People even ask if we should even have a conference at all. After the AAAA conference last year, they said, “Is there any purpose of it? Maybe we should have a day and just tack it on to the end of the media conference or maybe we should go to the ANA conference.” Of course we have to have this conference. We should have it twice a year, until we really feel confident about what we’re doing. But there would be no ANA without us, there would be no media conference without us, there would be no planning conference without the people in this room. So, I applaud the ANA, but let’s not confuse ourselves in terms of what we do.

Which leads me to my last point, which is compensation. It wouldn’t be a speech by somebody from the AAAA, or a chairman from the AAAA, without talking about compensation. Adweek quoted Steve Harty, I think, from BBH the other day and he said, “I’m tired of talking about compensation.” Well, so am I, but the truth is that it’s another thing going in the right direction, with P&G leading the way. The most sophisticated marketers on the planet are coming up with really good ways – and we’re going to talk about compensation tomorrow. We said to ourselves, “should we really have another compensation conversation?” Yes. Until we all get comfortable with how we talk about how we should be compensated, yes, we should. I think it’s very simple. We’re not going back to the commissions system, sorry. Wouldn’t that be great? Marking up production 17.65 percent. Think about it, 15 percent, 17.65… what a pipe dream that is. We’re not going back that way. This idea of fee with scope of work is ridiculous. It’s just absurd and that’s what we have to fight. It’s very simple – you have to come up with a fee, and you’ve got to tie it to sales. I don’t see how it could be any simpler. We all have to get together and say, “You know what? It’s fair.” You’re all going to work out your own deals, but I agree with Steve: let’s stop whining about it. Let’s stop being wimps about it.

Here’s another one of my favorite quotes, from Joe Frazier: “Cheat on your roadwork and they’ll find you under the bright lights.” I love that. Only Joe Frazier could have said that and it has so much meaning. That’s what we’re in. I know we’re all in the same thing because I talk to a lot of you every day. It’s just hard work right now. The industry has fundamentally changed, we’ve changed, our businesses have changed, we have to make a ton of new decisions, and we have to change the way we do our business. It’s just roadwork. This is just execution. All industries re-calibrate themselves. How would you like to be in the music business? Kids eighteen to twenty-four bought thirty-three percent fewer CDs last year than the year before. That is a tough business. We’re not even in that tough a business. It’s just hard work. It’s just Joe Frazier stuff. It’s not a big deal and we can see it and it’s being done. That’s our challenge.

That was then; this is now. I think that this is the best time to be in this business that I’ve been in, in a long time. I guess that’s from when I first got in, but it started to change twenty-five years ago. I’ve never seen it in such a positive and exciting way. When you walk down the hall and you go into rooms, the excitement that’s generated when people are showing you things that you’ve never seen before – whether it’s web-based, or promotion, or it’s a media idea – it’s never been as exciting as it is right now. And it’s not just kids, by the way, coming off that boat. It’s the guys you’re going to hear from today; it’s Irwin Gotlieb; it’s Lee Clow. These guys are digital guys. I was at a Google thing with Irwin – this is a true story – and they were teaching us about Google, if you can learn about Google. We had coaches and we all had our computers and they were showing us the coolest websites, and the coolest things happening on the web, and one kid yelled over to another kid, “Hey, how do you get on blank-blank-blank website?” And the kid said, “I don’t know,” but Irwin knew. And then they asked again about blank-blank-blank website and they didn’t know, but Irwin knew. I walked out of there and said to myself that it’s not about age, it’s about mindset. Lee’s going to give you a presentation about media arts. He’s been kicking us in the butt about media arts for five years now – he’s relentless about new ways of doing business. I haven’t been in a meeting with Lee Clow where we started with a story-board in five years. So it’s not about the naysayers. It’s a really fantastic time.

I think that we have to decide: this organization can be a great place, a great meeting to come to, and a good organization, if you guys get involved. There are a lot of new people on the board; there are a lot of new people getting involved in the AAAA on different committees. What I’ll ask is for lots of feedback about this. If you like this program that we do in the next two days, fine; if you think you can improve it, fine; if you want to hear Eric Keshin from McCann talk next year, we’ll have Eric talk next year. But it’s all about you guys. It’s a wonderful time. I like now; I don’t care about then. I really like now. It’s a lot of fun. I hope we have a good time in the next two days. We tried to make it quick, and fast, not a lot of speeches – this afternoon’s going to be a blast. Make sure you go to those. Matt, Colleen, and Carla spent a lot of time and have worked extremely hard to make sure that you can get something out of those three sessions, and that you can walk out of here and say to those digital kids, “You don’t know anything. I heard Irwin talk. I was in one of those sessions.” Enjoy your time. Thank you very much.

Tom Carroll 

Tom Carroll
President and CEO
TBWA Worldwide

American Association of Advertising Agencies

2008 Leadership Conference

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