For an assessment of the first half of 2002, SHOOT asked industry leaders on the agency and production company sides of the business to cite the trends, significant developments, and the state of creativity. The answers to a series of questions—What are the trends and developments on the agency and production sides of the business that you’ve noticed in the past six months? Any surprises and/or disappointments? Overall, what do you think of the state of creativity? What do you expect from the second half of the year?—are below.
Mark Androw
Executive producer
The Story Companies,
bicoastal and Chicago
Vice chairman, AICP
National Board
I’ve seen a lot more boards with real people that are based on real people situations [as opposed to] using real people as shills for the client. There are more visual storytelling spots…stories with emotion; it could be a reaction to the events of Sept. 11. I’m seeing less humor overall, and less wacky humor: part of that may be due to the [dearth of] dot-com advertising. I can’t say I’m seeing a lot of cutting-edge creativity lately. People seem to be playing it safer. I’ve also noticed that music-driven, vignette-type spots seem to be out of favor.
People are going out of the country to shoot spots with more than three or four principals, and spots that are running on network television, in order to save on SAG costs, although that’s nothing new. But they are staying local to shoot spots with less than three principals, or spots that aren’t for network airing, so I guess that’s good.
It’s hard to say what will happen in the second half of the year. But from the people I’ve been talking to at agencies, it seems there is a lot of work brewing. There may be more boards in the second half of the year, and it seems as if they are multiple-spot campaigns, as opposed to single spots.
Michael Appel
Owner/executive producer
Coppos Films, bicoastal
Everyone realizes that our business is in a state of evolution right now, and in order to thrive and in some cases survive, we all need to be ready to adapt to the changes in the marketplace. One major trend that we tracked for several years, but that has now become a reality is that ad agencies are expecting production companies to increase their range of responsibilities beyond production.
Two key areas that we are now asked to handle are talent negotiation and buy-outs, as well as postproduction. This has forced production companies to stretch ever-shrinking budgets farther by shooting abroad. The advantages of the exchange rate and tax breaks found in other countries have forced many companies to shoot outside the United States. That is why you have seen such a measured decrease in filming in cities like Los Angeles and New York.
As a business owner, I have not been surprised by this trend becoming a reality. I am, however, a bit disappointed because the economic exposure is increasing for production companies while the profit margins are simultaneously decreasing. This forces us to be smarter about the ways we do business, which is always a good lesson to learn. But everyone knows that the smaller the profit margins, the harder it is to expand and grow as a business.
With budgets continuing to shrink, many agencies are not being given the room to stretch their creativity. However, you do see an expansion of the creativity to new formats such as product placement in short films. Sometimes in economically conservative years, you see major changes happen because people force themselves to look at new ways of doing things and new avenues to express their creativity. This may very well be one of those times.
We have definitely seen an increase in production over the last few months, so we hope there will be a turnaround in the second half of 2002 with an increase in filmmaking and the number of commercials being made.
Nancy Axthelm
Executive VP/director of
broadcast production
Grey, New York
It seems to me that while the business has been in recovery this year, the good work has been more lighthearted and fun. The view of life in commercials seems to be, happily, not taking itself too seriously. And yet, the visuals are stunning—some of the filmmaking is amazing—as it should be, if we have to fear the every-growing TiVo effect.
The one development in the business that I have really enjoyed this year is the collaborative nature between agencies and the production community that seems to have been born of necessity after last September. At first it was a real foxhole reaction to pull together to keep this industry alive, but it grew into some amazing relationships that have been the basis for some very interesting new thinking. I am really enjoying myself again—and enjoying working with some very smart and interesting people on both the agency side and the production side.
Disappointments? Sure there are some, but I’m not dwelling on those. As both Nike and Xbox keep telling us, life’s short, play.
Entertainment is now so clearly the life force of what we need to do, so creativity should be at a new height. And it is in some areas…but there is a definite conservative streak out there this year with both ideas and money, and we’ve had to deal with that. On the other hand, clients do seem to be more willing to look at new ideas and initiatives—non-traditional ideas. I think BMW films has done a great service by pushing open a brand-new creative door. I think we’ll be finding more ways to stretch our reach and appeal. [In the second half of the year, I expect] inventiveness—on all fronts. I’m a terminal optimist.
Matt Bijarchi
Director of broadcast production
Young & Rubicam, Chicago
It seems that things are getting busier, within our agency, and judging from conversations with friends at other agencies and production companies, there’s more board flow. The second half of the year promises to be busier and should set the tone for a 2003 that is much better than 2002.
In terms of creative trends, it seems clients are wanting agencies to play it a little bit safer. I feel for people on the creative side because it just adds to the box that they have to work in. I’ve seen stuff that is creative and that hasn’t been done for a ton of money. That started with the [SAG] strike, and then with the downturn in the economy and post-9/11…the money just isn’t there. But great work is still being done.
Michael Bodnarchek
Co-president/CEO
A Band Apart, Los Angeles
There were a lot of predictions being made about work slowing down or picking up, and nothing definitive has really come to fruition. In the last six months, A Band Apart has actually seen a dramatic increase in workflow.
The only major disappointment is the past six months is that some very good companies were forced to close their doors due to shifts in the economy, and its always sad to see anyone go out of business.
There are always going to be some good and some not so good boards out there. A really positive creative trend that we’ve noticed is that agencies are more often coming to our directors in the earliest conceptual stages of campaigns. This allows directors to get more involved in the spot creative, and makes for a more collaborative, interesting experience and ultimately tends to yield more compelling work.
I’m optimistic that the rest of the year will see more advertising spending because in a slow economy companies need to advertise more. Our roster of commercial directors is extremely talented, and when you have a strong company, and good directors you will always be working. So we anticipate a lot from the second half of this year.
Mark D’Arcy and Jamie Ambler
Creative directors
Young & Rubicam, New York
For us the past six months have been really great. It all started in January with the launch of the Sony Dreams project at MoMA. That idea came from Ken Yagoda’s (Y&R, New York’s head of broadcast production) very clever idea. To put Sony’s new 24P camera in the hands of a small group of commercial directors and see what they could create with it. Our job was to come up with a brief so we muttered "make them about dreams," and promptly went to lunch.
Nine top directors then set about, with complete artistic freedom, to realize their vision in bringing dreams to life. The end results were quite extraordinary and it was fantastic to see these directors explore creative territory that they’re not known for in the industry.
We were looking forward to Chuck and Clay making us laugh. They made us reflect. The stop-frame masterpiece Simon Blake was expected to deliver turned out to be a live-action surrealist journey. With Tony Kaye we figured we’d be shocked and amazed and we were shocked.
While we don’t deserve credit for a single metaphorical frame of these short films, the collaborative nature of the project has inspired the way we’ve worked every day since. You see, it reminded us that clever ideas don’t just come from creative teams they come from clever people. And the more clever people you hang out with, the less work you have to do.
TV is better than most people think but print is not there yet. We all need to take more risks.
Jonathan Davis
Executive VP/director of
broadcast production
Leo Burnett USA, Chicago
The economic climate as it is, for me, there’s not any major new trends in terms of production. Money is tougher than ever. What I’m enjoying is that, as agencies, we are diversifying more. While we continue to produce traditional broadcast advertising, we’re now doing projects for which we are producing material solely for the Internet—which we’re doing on shoestring budgets. And from my conversations with production companies, or at least some of the larger ones, they seem to be diversifying more also, in terms of interactive or Internet projects. Some are also moving toward programming and product placement. But production companies are not heavily investing in directorial talent.
One surprise was that there were not as many gold Lions given out in the TV portion of the Cannes [International Advertising Festival] as there are traditionally. On the whole, the awards were very fair, but it was sad. From the whole world, there was such a small amount of great ads. The work that is coming through is being justly rewarded, but there is a great lack of creative work.
I think the overall state of creativity is poor, as it typically is during a recession. However, I’m finding that—even when advertising is quite a hard sell—there is more of an idea there. When I first came here several years ago, so many reels had beautiful visuals and vignettes. Now, I think the trend is to focus on more of an idea.
For the second half of the year, I’m very hopeful that things will get better, because I have a very positive outlook. Personally at Burnett, we’re building our creative department and making some new hires. It makes me very excited about the work that will come through in the next six months. And while the level of staffing is not what it was two years ago, the people I have are all busy.
Stephen Dickstein
Owner/executive producer
Partizan, bicoastal/international
The production business has always reflected macro economic conditions of which this business cycle is no exception. What is different in this soft economy is the added pressure on clients to find consistent audiences for ad messages. With TiVo looming on the horizon, and the Web taking an increasing share of time from TV audiences, the stage is being set for convergent media and other new marketing solutions. This explains the inconsistency of the production and advertising business.
Having said this, there are always directorial talents that transcend business trends and are in demand, despite market conditions. There are just fewer of them and competition is fierce.
There is always a relationship between the economy’s strength and the ‘state of creativity.’ In the go-go ’90s dot-coms had to be very aggressive about creating a strong but unsustainable first impression. This drove industry creative for a number of years. When the dot-com bust came, the economy still had steam behind it, but clients became cautious as they attempted to maintain, rather than expand on the gains they had achieved. Now, as in other soft economic cycles, agencies are happy to sell anything to their reluctant client partners, so there are few who are willing to jump on their swords for great work. Again, and as at this year’s Cannes show, there are always exceptions and great work can be done.
Also, an example of when a bad economy actually created amazing work was in the early ’90s in London. Conditions at that time were so bad that marketers and marketing managers having a ‘nothing to lose’ attitude, produced work with a school of directors (Frank Budgen, Tony Kaye, Jonathan Glazer and Daniel Kleinman, to name a few) who still dominate today, a decade later.
Perhaps the best recent news is that funny beer ads are less likely, by half, to be skipped through on TiVo, than hard sell fast food and packaged-goods commercials. This is as good an indication, as we have all predicted, that entertainment and marketing is THE partnership of the future.
[For the final half of the year] more discontinuity, and market unpredictability. The economy has no sign of correcting and marketers are still searching for answers beyond traditional thinking and execution. Safe havens provided by known companies and established top end directorial talent will continue to dominate, effecting, as it has already, the pace of new yet unoriginal entries, and further pressuring those who don’t contribute unique talent, as well as cost. However, standout talent will thrive by expanding their list of potential clients.
Dan Duffy
Executive producer,
Hungry man, bicoastal/
international
There are so many issues facing the production community currently and many of those have been ignored. One trend in particular that’s very important is the fact that agency people are all getting taller—and production people are all relatively shorter. I can name maybe five executive producers, or line producers, that stand over 5′ 8," and that’s with lifts—but every pre-pro I go into there are all these six-footers from the agency. I mean, every one of our directors barely reaches 5′ 7." (Now, if you ask them they might tell you something different). I haven’t been able to put my finger on why, but I’ve never in my life been described as statuesque and it bothers me. Because eventually a lot of those creative directors, or copywriters are going to become directors and sooner or later they’re gonna push us short people out.
There are still tons of great creatives out there fighting the good fight trying to get good work done. They’re not always able to break through the client barriers but the better agencies have great people still trying hard to do just that. With the ultimate goal to come out west and get away from the humidity, or just to stay at a nice hotel in Beverly Hills, and order a $20 Mojito from the lobby bar and not have a second thought. Most people can’t do that in real life—that’s why we all like being in this business. And, if you get a good spot produced that your Mom and Dad see on TV, it’s all worth it.
Texas East
Senior partner/co-director of
broadcast production
Ogilvy & Mather, New York
The biggest trends and developments that I see are the lack of either. Questions like ‘what about TiVo,’ ‘network audience falloff,’ ‘advertainment,’ ‘alternative media,’ ‘war,’ ‘terrorism,’ ‘corporate integrity,’ ‘the Internet’ and at the forefront of all these questions, ‘the economy,’ are the unknowns that have paralyzed the business of advertising.
The state of creativity is as it almost always is—a few great ads get approved by a few great clients and are then executed perfectly by a few very talented people. The rest is not.
I believe that we are more than a few months away from recovery. I expect more corporate scandals and falling consumer confidence. I hope that we will see some rebound and growth in the first or second quarter of 2003.
Grant Hill
Executive VP/executive
production director
DDB Chicago
In terms of the last six months, it’s been one of the industry’s most difficult times. Last fall, looking ahead after the events of last Sept.11 and with the recession building … that this has been a difficult period has not been surprising.
The work at our agency has been down; the number of spots produced is down. And the staff at the agency is down, with people not being replaced. Smaller staffs are definitely a trend. And due to the smaller amount of work being produced, it has been extremely difficult for freelance producers to get employment this year. We’re very aware of that situation. Agencies are watching expenses more carefully with regard to that.
But we’re at the bottom of the business cycle; advertising reflects it ahead of [other industries], and this is not a permanent condition. Starting from the early ’90s, we’ve had a 10-year run that’s been a wonderful period. Our clients and the advertising industry will be the recipient of better times, but I think that will be starting next year, not this year. We’ll regain our foundation and our footing, and rebuild for the rest of this decade.
Jim Lesser
Creative director
BBDO West, Los Angeles
Things have slowed so much over the past twelve to eighteen months that there are far more directors than there is work for them to do. The result is that more than ever, directors seem to be really seeking out the great boards. If you have one, you’re golden because they’ll be fighting for it.
Creativity is in a wonderful place. More and more clients want to do great work because they know IT’S EFFECTIVE. The more media channels there are and the easier it is to ‘skip’ ads, the more important it becomes to connect with the consumer on a gut level.
I’m very optimistic [about the second half of the year]. I think we’re pulling out of this slump. I don’t think anyone expects a quick bounce but more of a gradual, steady recovery.
Diane McArter
Managing director
Omaha Pictures, Santa Monica
There have been a number of pivotal events that have impacted our industry. There was the economic downturn, the events of 9/11—which further sent business plummeting—the threat of terrorism, the influence of the global economy, new technology and the lack of consumer confidence in the wake of [the scandals of] Enron and WorldCom. The convergence of so many factors has been so impactful.
Ultimately, all of these have forced us to come back to basics—to consider what is it that we do as production companies and how we do it. In thinking about the new and different way in which we reach audiences, it all comes down to creativity. For agencies, this means coming up with strong ideas that cut through the clutter. As production companies, we provide unique creative talent and our role in the food chain is to foster that talent.
The profitability of production companies has been dramatically eroded over the past few years. Some shops have made the error of running on volume rather than profitability. As companies, we need to be strong financially. It’s challenging: profit margins are so slim, and agencies are taking longer to pay us. They don’t want to pay us until their client pays them…yet our contract is with the agencies.
Particularly for smaller production companies, it’s hard to make necessary investments in developing new talent. We’re a vital part of the equation, and I think while agencies value the contributions of a director, they undervalue those of the production company; there needs to be a more equitable balance. I think there are some lingering misperceptions about how the production business operates, and we as production companies need to do a better job at communicating to agencies. There needs to be a better understanding and more trust between agencies and production companies. They need to understand how our business operates so that they can defend it to their clients and to cost controllers, who are scrutinizing every dollar.
In terms of the state of creativity overall, there are two different camps. In these uncertain times, there is the advertising done by conservative clients who make the process of getting jobs awarded a challenge. Then, I’ve seen advertising done by clients who understand the true voice of their brand, who have confidence in it. Their work is risky and innovative. In general, I’m starting to see more of the dark, ironic, sarcastic humor coming back. After 9/11, everyone was cautious in their advertising, but that cutting, edgy humor works.
Tom Mooney
Partner/managing director
Headquarters, bicoastal
Trends & Developments
1. Everyone is getting younger or fired
2. Budgets are getting smaller
3. Production is not getting smaller
Surprises:
The Nets
Disappointments
1. No Lions
2. Less Money
3. I am sexually invisible
Creativity
Overall is safe.
2nd Half of the Year
1. The Yanks to the series
2. Boston to fade
3. I will be sexually visible
Bob Nelson
Executive VP/managing director,
global creative services
D’Arcy, New York
OK, what can they throw at us next?
Producers usually figure out a way to keep going, no matter what. But you have to admit that the last year has been the most trying of our careers. You’re asking for predictions for the second half of the year? Look at the past twelve months. Who would have thought?
Back in late October I had the privilege of working with a courageous client who decided to keep shooting, and to do it in New York. We got one of the first location permits to film in the city after 9/11. We were actually trying to do comedy (talk about denial). The shot was lit, the talent rehearsed. Suddenly, sixty cell phones go off simultaneously. Anthrax. NBC. We’re shooting across the street. Try concentrating on a great performance that day (try concentrating on anything that day, besides the train schedule). The spot was OK. It aired. It will never make my reel.
Since that day, we’ve experienced war, recession, serial layoffs, Enron, the collapse of Arthur Andersen, and now the latest: fear and loathing of advertising stocks. Creativity requires courage, and courage seems to be in short supply in America’s boardrooms these days.
David Perry
Director of broadcast production
Saatchi & Saatchi,
New York
A lot of production continues to leave the country. But where it used to be for cost, we are increasingly traveling to work with directors who give us a different interpretation to our work and a different visual style that we get in the U.S. And American directors who have been working abroad have had their vision expanded as well. Unfortunately, foreign directors who might benefit by working in the U.S. seldom get a chance because their budgets don’t allow them to work here.
The conventional wisdom is that when the economy is down, creativity suffers. But that is just an excuse. We are just as likely to get good work in bad times, as we are to get bad work in good times. We had eight years of economic boom in the 1990s, but no one is calling it the Golden Age of Creativity. It takes more than having the Dow at 12,000 to get great work through clients. Right now I think we are holding our own creatively.
The next six months will be like the first six months: better than last year but not as good as next year.
Dennis Ryan
Chief creative officer
Element 79 Partners,
Chicago
I do think the 4As was interesting in terms of some of the quotes that were issued. I do think our industry is going through a very profound change. Fiscally, it is changing. Clients are demanding to know what return on their investment is, which is hard to guarantee.
We do a lot of wonderful, big advertising here; there are so many brands that won’t [soon] be doing that. I was watching the winners at Cannes—we seem to keep awarding things that have been done before. A lot of the stuff that won was pretty good, but it was kind of a narrow band.
I do think there is room for smaller innovative groups [in advertising], be it our own agency or who ever. There is an opportunity for smaller, more nimble shops…I’m talking even about four or five-person operations. Maybe clients don’t want a traditional agencies with all the structure.
Ever since I’ve started in the business, people have bemoaned the state of creativity. I think it’s [a situation where] people have rose-colored memories of the past. It’s like how people are always raving about the first few years of Saturday Night Live, but I bet if you go watch any of those shows now you’ll turn it off halfway through; they’re dull.
Creatively, Bill Bernbach remains the man who set the pace, but of course he was smart as a whip, which always helps. But you always find people who are terrified at the deplorable state of creativity. I do think there’s a demand for a higher taste level. It makes it more challenging to break through the clutter. Everything’s always been about being fresh, but also vaguely familiar. There has been very occasionally truly groundbreaking creative work. I think advertising doesn’t so much lead the culture as it reflects it. Actually, it’s not as if there is a definitive style in advertising right now. I kind of like that because it shows that more people are doing things based on the brand.
Comedy is back. There is still an awareness of appropriate comedy but people are still willing to laugh. And there are things [in advertising] that celebrate the non-mainstream, which could be a putative trend…the desire to see more interesting stories. For instance, when Traktor burst on the scene, they helped change ideas about casting.
Lauren Schwartz
Owner/executive producer
kaboom productions,
San Francisco
Generally speaking, I’ve found that client and agency budgets are shrinking while crews are still demanding the same pay scale, and the production company often gets caught in the middle with shrinking production fees. There is less work available out there—so many top-tier directors have been forced to compete for projects they would have never considered before. Consequently, this trend leaves even lower budgets and fewer desirable boards out there for the second and third tier directors. There is diminished access to quality work, and we’re fighting harder to get what is available.
In order to get more production for the agency and client dollar, we have been shooting much of our work out of the country, mainly in Canada. The budgets I’m presented with these days just can’t work within the states. Again, budgets are shrinking, but expectations remain high so something has to give. And it usually means that we head north to shoot. Emotionally, everyone wants to keep work here, but realistically, it doesn’t work.
I think that after 9/11, and in the wake of the tough economy, no one has been willing to take risks—not financially, not personally, and not creatively. Agencies are trying to hold onto the clients they have, and this often means not sticking one’s neck out for ‘edgier’ creative. As a result, the boards we’ve seen have not been as creative. There are still a handful of shops out there doing outstanding creative work, but the majority of agencies are doing middle-of-the-road work, which is reflected in the boards we see. Of course, the aforementioned trends that are taking place (well-known directors going for jobs they would not have in the past) only intensify these changes in creativity.
I do hope to see revitalization in the second half of the year. It needs to, and I’m optimistic that it will. However, I don’t think things will be ‘normal’ again until the first half of next year. And we certainly won’t witness the dot-com explosion again, which led to so much work being done.
Frank Scherma
Proprietor
@radical.media, bicoastal/
international
A lot of what I see happening is that agencies and clients are increasingly going to production companies with which they have a strong relationship. They want to know that a company’s foundation is strong. Relationships are very important to agencies and clients.
Whereas, the situation used to be [akin to] what I call my ‘restaurant theory’: you go to a restaurant one night, and then a new one opens up down the block, and so you try that one. Agencies that hired one director to shoot a round of spots for a campaign commonly would hire a different guy to shoot subsequent spots in that same campaign. Now, there’s the feeling with agencies that, ‘Why screw this up?’ Agencies are going back to the director because they don’t have to re-teach the strategy and who is the target they’re trying to reach.
In terms of creativity, I don’t think it’s at its peak. People are not doing as many [ads] and they are being a little safer with the ads they do.
For the second half of the year, I expect it to get a little bit better, but not overwhelmingly so. There is no big TV event like the Olympics coming up, although there are things like the Academy Awards, the Grammy Awards, the Super Bowl. Big TV events are still very important because everything else is so fragmented. I don’t foresee a sudden economic turnaround. I think once America gets back on track with corporate responsibilities and corporate reporting, that will be very important and then there will be a bit of a turnaround. Once some of the bad corporate reporting comes out, there’s going to have to be some image campaigns.
Cami Taylor
Co-owner, Crossroads Films,
bicoastal and Chicago
The big agency trends seem to be shooting outside the country, being recommended on a job and having the client veto the recommend and go with another director, and lastly, bidding groups consisting of up to six directors with an often wildly inconsistent bid mix.
The obvious production company development has been the rapid and huge growth of MJZ, seemingly somewhat based on the failed model of Propaganda. Can this be a successful way to structure a production company?
There has been less good creative available based on the fact that there are so many directors vying for the best creative spots.
Since the unexpected is the norm, I’m sure there will be more surprises.
