The Pitch

GSD&M needed a car account. Mazda needed a new advertising agency. Could the brash Austinites help the Japanese giant—and vice versa?

March 1998By Comments

ON A SUNNY THURSDAY MORNING LAST OCTOBER, a twelve-person team from GSD&M—Austin’s hot homegrown ad agency—boarded a chartered plane at Robert Mueller Municipal Airport. They were headed for Irvine, California, on a quest for the advertising industry’s Holy Grail: a major car-brand account.

The client was Mazda’s North American operations. Never mind that the $240 million account would increase GSD&M’s billings, which were $513 million in 1997, by roughly half. Winning the closely watched Mazda review would serve notice on Madison Avenue that the 26-year-old agency had spread its wings beyond regional clients like Southwest Airlines and the Texas lottery and had arrived big-time on the national scene. “When you land a major car-brand account, it puts you on a different level of perception,” says Roy M. Spence, a co-founder of GSD&M and its president. Indeed, an automaker’s brand account is a badge of prestige in the ad world. “An automobile and an airline—those are the big ones,” says Steve Krajewski, Adweek magazine’s Southwest bureau chief. “GSD&M has its airline. Now it needs an automobile.”

Car accounts don’t come up for review every day—just seven times since 1990. So when Mazda’s agency of 27 years, Foote, Cone, and Belding, resigned the account last summer because of a conflict (its parent company, True North Communications, acquired the Chrysler Corporation’s ad agency), GSD&M did all it could to capture the business—including turning its Austin headquarters into a pseudo-showroom. There were sleek black Mazdas, complete with vanity plates that read gr8 ads, parked in the lobby, and there were three more in the parking lot for employees to test-drive for inspiration. Only once before had the agency come close to landing a car account: in 1995, when it made it to the semifinals of a $90 million Volkswagen review.

This time around, GSD&M—which was ranked sixty-eighth in gross income among the nation’s ad agencies in 1996—was one of three finalists. The others were the Los Angeles office of Ogilvy and Mather (the creator of American Express’ “Don’t Leave Home Without It” campaign), a division of Ogilvy and Mather Worldwide, which was ranked tenth; and W. B. Doner and Company, of Baltimore and Southfield, Michigan, which was ranked forty-fourth. (A fourth agency, Deutsch of New York, withdrew from the finals in mid-September, citing pressing business for other clients.)

The speculation was that Ogilvy and Mather would win the coveted account because it already handled European assignments for the Ford Motor Company, which owns a 34 percent interest in Mazda. Doner also had a relationship with Ford: It had previously created campaigns for more than seven hundred Ford dealers across the country. But some advertising industry observers were betting that Mazda’s new chief executive of North American operations, Richard N. Beattie, was a risk taker who would choose an agency not so closely associated with Ford.

A surprise win over Ogilvy and Doner wouldn’t have been the first time GSD&M scored an upset over better-positioned rivals. In 1989 the agency raised eyebrows in New York when it was chosen by the Wall Street Journal to handle its hundredth-anniversary campaign. And in June 1995 GSD&M landed MasterCard International’s $80 million—plus media-buying account, much to the chagrin of Madison Avenue. “It was the largest single media account ever to leave New York,” Spence brags. “New York just went batshit.” Such successes have helped GSD&M solidify its standing in Texas, where it ranks second in billings (behind Temerlin McClain of Irving) and fourth in revenues (behind Temerlin McClain, DDB Needham Dallas, and the Richards Group of Dallas). “They’re a complete enigma in the advertising world: a half-a-billion-dollar agency sitting in Austin, Texas,” says Adweek’s Krajewski. “They’re saying geography is irrelevant.”

What makes it irrelevant is the quality of GSD&M’s ads. Some of the agency’s most memorable campaigns have featured the superhero Scratchman, a spokesman for the Texas lottery; a jet painted to resemble Shamu, a joint promotion for Southwest Airlines and Sea World; and the Texas Department of Transportation’s anti-litter slogan “Don’t Mess With Texas.” Yet paradoxically, this is one ad agency that denies it’s in the ad business. Its product, Spence says, is “visionary” ideas. “The marketplace is ad rich and idea poor,” he laments. “What the ads lack in relevance they make up for in volume.” To counteract that reality, GSD&M practices a philosophy of “values-based branding,” a concept that builds on legendary adman David Ogilvy’s theory of “brand personality.” Ogilvy preached the association of a company or product with consistent, appealing images “rather than any trivial product difference.” GSD&M goes further to link a brand with a value that is relevant to consumers. So Southwest Airlines isn’t in the airline business but, rather, the freedom business. And Doubletree Hotels doesn’t rent hotel rooms—it sells peace of mind.

The architect of that philosophy is 49-year-old Spence, a Jeff Bridges look-alike praised by Adweek as GSD&M’s “greatest asset” and “resident preacher” when the magazine named it Southwest Agency of the Year for 1996. Indeed, the likable firebrand delivers impassioned weekly sermons to his staff of 350 from a custom-built pulpit perched halfway up the lobby stairway of Idea City, GSD&M’s new $7 million headquarters. A native of Brownwood—where, as quarterback, he led his high school team to the state championship—Spence is also a player in the world of Democratic party politics. He has worked on behalf of Texans like U.S. Senate candidate Bob Krueger and Governor Ann Richards, but his closest ties are to Bill Clinton, whose 1992 presidential campaign he advised. The walls of his office, in fact, are covered with mementos of their long friendship: There’s a photo of Spence with the Clintons at a surprise birthday party for Hillary and another of the first lady jogging in a GSD&M T-shirt, plus a framed handwritten note from Bill and an autographed copy of his 1993 State of the Union address.

Spence is the S in GSD&M. The G, D, and M were his friends and fellow students in the University of Texas at Austin’s class of 1971: Steve Gurasich, a journalism and advertising major who is now the agency’s chairman and CEO; James Darilek, a talented artist who departed in the late seventies in favor of magazine work (including a stint as Texas Monthly’s art director); and Tim McClure, an advertising major who is now the chief creative officer. The foursome, along with radio-television-film major Judy Trabulsi, now the executive media director, were inspired to start the agency by media guru Marshall McLuhan’s observation that “the medium is the message.” Says Spence, a UT government major: “We figured we couldn’t make a living legally being hippies, so we decided to go into ads.”

After an initial period of relative obscurity, during which GSD&M represented mostly local clients like Henna Chevrolet and Pearl Beer, the agency spent the eighties building an impressive roster of regional clients that included Southwest, retail giant Wal-Mart, and chain restaurateur Brinker International. In 1990 GSD&M merged with London’s GGT Group P.L.C., the world’s fifteenth-largest advertising holding company, and the years since have seen the agency win a number of higher-profile clients, including the Washington, D.C.—based home mortgage lender Fannie Mae, Doubletree Hotels, MasterCard International (now a $120 million account), Bank of America ($40 million), the Steel Alliance ($100 million over 5 years), Texas-based SBC Communications (initially worth $35 million), Haggar Apparel ($13 million), and Pennzoil ($50 million). New business and growth from existing accounts like Wal-Mart—whose billings are at more than $100 million today, up from $5 million in 1987—should push GSD&M’s total for 1998 to nearly $710 million.

Impressive numbers, but they would be even better if a car account were part of the mix. Last fall, as they got their pitch ready, GSD&M officials knew a deal with Mazda would “put them over the top,” says Krajewski. And they thought a deal would be good for Mazda, Japan’s fourth-largest carmaker. Its U.S. sales had been flat—the company was ranked a disappointing number nine—and it had other problems too, including a fuzzy brand image and the absence of a large sport-utility vehicle in its product line. GSD&M was hoping Mazda was open to a new approach. “We’re never going to be the safe choice,” says Rich Terry, one of the agency’s nine creative directors, “but it’s more fun to be the pirates than the Navy.”

With just six weeks to come up with the winning campaign, the agency went into overdrive, with some employees working almost around the clock. (To make that possible, GSD&M pays junior staffers to walk dogs, pick up dry cleaning, and the like so that senior staffers can log long hours.) Some 25 creative teams were charged with coming up with “visionary” ideas for Mazda, but the winning slogan came from an unlikely source: a junior writer, Adam Butler, and his younger brother Marty, a recent UT graduate working at the agency as an intern. “We knew in our guts that they had it right,” says James Martin, GSD&M’s director of marketplace planning. And that slogan was? Adam-and-his-brother’s idea, as it became known in-house, was “Steel, Glass, Rubber, Soul.”

Adam-and-his-brother’s idea was the kernel around which the TV, print, and outdoor—that is, billboards—advertisements were created. To help identify what the Mazda brand means to consumers, GSD&M conducted four rounds of focus groups in eight U.S. and Canadian cities and sent Mazda dealers questionnaires. A two-day photo shoot in the North Carolina mountains was used to build storyboards illustrating the campaign concept and strategy. In addition to a creative campaign and slogan, GSD&M also needed to devise a media strategy—a plan for which TV shows and other media to buy and when.

At three in the afternoon on October 16, the GSD&M team was given just an hour and a half to reveal all that to Mazda’s review committee. (Ogilvy and Doner were scheduled to make their presentations the following day.) “The pitch is ninety minutes of scripted spontaneity,” explains creative director David Crawford. “It’s like a play you only put on once.”

Act I opened with Spence, who has a bright future as a motivational speaker if he should ever leave the ad business. He introduced his colleagues and set the tone. Then, after a brief organizational overview by group account director J. B. Raftus (during which he dropped his index cards) and a lesson on values-based branding by marketplace planning director Martin, came a two-minute “brand-essence” music video, or mood piece, illustrating GSD&M’s visionary idea for Mazda. Then Spence returned to unveil Adam-and-his-brother’s slogan, which he hoped would surpass Foote, Cone, and Belding’s “Passion for the Road.”

The creative portion of the pitch kicked off with creative director Terry and director of business development Alicia Kriese presenting the proposed TV campaign. Standing in front of giant storyboards of pictures from the North Carolina shoot, Terry showed half a dozen spots illustrating the commercial concept. After presenting the print, outdoor, and dealer strategies, Trabulsi and senior vice president and media director Gwyn David detailed the agency’s media plan. Then Spence returned to close the show. All told, the pitch ran ten minutes over the allotted time, which apparently wasn’t a problem: The review committee asked to see the video again.

Still, it wasn’t enough. Nearly two weeks later, Mazda officials announced their choice: Doner, whose winning campaign is set to debut March 14 (until then, the new slogan is hush-hush). Mazda’s CEO called Spence, who was en route from Austin to San Francisco, to break the news. Spence quickly informed his staff—which had been in a state of high anxiety—in a long, emotional voice-mail message. Reflecting on the loss, Spence notes that Doner had an infrastructure in place that GSD&M lacked: a network of offices across the country set up to handle the Ford dealer associations. “We were willing to create it, but we didn’t have it,” he says. “Losing sucks, but we learned a hell of a lot about the car business.”

Rebounding from that bitter disappointment, GSD&M rang out 1997 on a high note. The nation’s second-biggest local telephone company, San Antonio—based SBC Communications, awarded both its media-buying and creative services accounts to the agency—a combined $220 million in billings. “It’s a huge win,” Spence says, crediting media director David for her hard work. (Tragically, the forty-year-old David died in mid-December in a car accident on her way home from the GSD&M Christmas party.) Purely in dollar terms, the SBC business is nearly as lucrative as the Mazda account would have been. “But it’s not a car account,” says Adweek’s Krajewski. And Spence knows it. He says GSD&M is content to live for now without an automaker’s brand account, but he’d still love the opportunity to come up with a “visionary idea that moves metal.”

He may get that opportunity. In January Porsche Cars North America announced it would soon end its five-year relationship with Goodby, Silverstein, and Partners of San Francisco and put its $10 million to $15 million account up for review. Despite its small size, the account is considered a plum within the advertising industry, and GSD&M is interested in making a pitch.

Will there soon be Porsches in the lobby of Idea City? “If I were a betting man,” says Krajewski, “I would not bet against Roy Spence.”

Alexandra M. Biesada wrote about the consolidation of the radio business in the November 1997 Texas Monthly.

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