Advertising explained, with Wieden+Kennedy CEO Neal Arthur

Advertising explained, with Wieden+Kennedy CEO Neal Arthur

One of the ways I think about Decoder is that we’re just taking a tour through all the parts of running a modern business. We talk to a lot of CEOs and heads of product, we’ve had chief legal officers and chief marketing officers on the show, and you all know how much I love talking to people in the creator industry. But one thing that always strikes me in all these conversations is how little any of us really pay attention to the advertising industry and how deeply connected it is to almost every other modern business. After all, you can start a company and invent a great product, but you still need to market it: you need to tell people about it and eventually convince them to buy it. And then the platform companies we all depend on mostly run on ads. Google and Meta’s entire consumer business is ads. And when we talk to those all those creators, they’re even more tied to ads: their distribution platforms like TikTok and YouTube are all ad-supported, and ads make up a huge portion of their revenue.

Because I’ve been thinking about advertising a lot, I invited Neal Arthur, the CEO of Wieden+Kennedy, onto the show. Wieden+Kennedy is one of the few independent major ad agencies in the world — and probably the coolest one? Weiden+Kennedy is the agency that came up with Just Do It for Nike and Bud Light Legends for Bud Light.

Coming off our conversation last week with Rare Beauty CMO Katie Welch about building a brand from the ground up using influencer marketing and potentially never hiring an ad agency, I wanted to get a view from the other side: how does a big ad agency work? Where does their money come from? So many of the big agencies are merging into what is called holding companies — why is Wieden still independent?

This conversation was really fun, and Neal was game to get deep in the weeds. I think you’ll like it. Okay, Neal Arthur, CEO of Weiden and Kennedy. Here we go.

Neal Arthur is the global CEO of Wieden+Kennedy, which is a very famous, very big ad agency. People tell me it’s the coolest ad agency, and we are going to talk about that. Welcome to Decoder.

Thanks, Nilay. It’s awesome to be here.

I am very excited to talk to you. I want to start with some basics. I think a lot of people work with a picture of agencies in their head that more or less comes from Mad Men, but that’s not how it works anymore. Give people the short version of what a modern ad agency does.

In some ways — and this is semi-controversial — it is not that dissimilar to Mad Men, in the sense that people sit around in a room and talk about ideas that can capture the collective imagination of people. It’s similar in that we use that framework of intent, design, and idea. The notion that there is tons of time and people just hang around drinking martinis is where it kind goes awry. That’s not really the business anymore for lots of reasons such as cultural change and societal shifts, but also because there is just so much more to do.

In 1960s advertising, I might have three months to figure out a TV spot that goes on the air for brand X. Now you have social posts, you have down-funnel direct marketing and advertising, you have a million things that need to get made every single day. The time for production and going out into the world has compressed dramatically.

The impact of that on the agency is that there is less time sitting around doing Mad Men things, and much more time working and figuring stuff out. I think there is a lot more time spent making and producing than you would have had at that time. Coming up with ideas is still the name of the game, but the manifestation of how that works is very different.

So there’s that part. If I come to you and say, “I need to advertise something to increase my sales,” you are going to come up with a pitch and some smart, creative people are going to make advertising. That will turn into all kinds of assets that you then distribute onto various media platforms.

Famously, in the Mad Men days, buying the space is where the agencies made money; you would buy time from the TV networks and bill the clients for the cost plus a markup, and that is how you would make extra money. I don’t think that is the case with the Instagrams of the world. How do you make your money?

It’s a service model. It is similar in nature to other service industries like law firms. You are paid a retainer or a project fee by a client and you determine the scope of work for that engagement. Then from there you have people who are oftentimes dedicated to that business. You are paying for time, for labor. We make money through that agreement, and they pay us for labor and time. Our output is a point of view on the brand and how that shows up in advertising.

All sorts of different services come at that point; some of it’s paid, some of it’s earned, some of it’s on this platform, some of it’s on that platform, et cetera. The money is retainer-based and works similarly to other service-based companies.

My background was as a lawyer, and my wife still is one. Lawyers famously bill in six-minute increments, which is great for the business side of the law firm, but totally nuts for the actual lawyers. Is that how you think about it too? “Okay. We’re going to sign a big car company and put 10 people on their account. We are going to bill out their time, and if they go over, we are going to bill them more.” If you have a central planning team or something else that gets involved, would you bill for that time too? Or is it a little fuzzier?

Our agency doesn’t function that way. We are very much a creative idea-driven agency, and a lot of what we do is a labor of love. When we think we are close to coming up with something really great, there is no way we would go to a client and say, “Oh, we’re over on hours.” Playing that game is prohibitive and is not beneficial for them or us. We focus less on hours and more on output.

When we talk to clients, we just want to make sure we have the right people on their business. From there, you can unlock a lot of different things and hopefully get far more output than you ever anticipated. It’s about securing the right team, not worrying about hours, nickel-and-diming, or being too specific about deliverables. In today’s world you never really know what you are going to make until you get started.

That is very familiar to me. Welcome to this podcast, we live it every week. So you have some people dedicated to some clients. You must have some central functions. How is Wieden+Kennedy structured?

In terms of structure, there is a very traditional way in which an agency works. At the top level of executive management, you will have somebody who represents the business side and somebody who represents the creative side.

Now Wieden+Kennedy is a creatively led agency, so that makes it very distinct. Even though I am the CEO of the company and represent the business side, my partner, Karl Lieberman — who is the chief creative officer — has the definitive say on what we do and don’t do. Wieden is known for that; that is our hallmark. We try to create a foundation and space for the culture of creativity to exist.

Then there are teams built around the actual accounts of our clients. They have some basic functions that are always client-facing, which include account management, leadership, CDs (creative directors), creatives, media, and strategy. There are a lot of other functions that make everything work as well, such as production, studio, design, and project management. You have a lot of different departments that are there to help support the creation and making of work.

At the top level it’s business and creative. From there you have teams that are built around certain clients.

I know that those teams built around certain clients are busy all the time, since you already said as much. If a huge airline company comes to you and says, “We need a new ad campaign,” then you make it. You are not immediately on to the next ad campaign. I always wonder, what happens with that team after the Super Bowl ad ships and the assets are out in the world?

That might be the biggest shift that has happened in the industry. Before, it was all about big; you had big moments and big budgets and big everything. You had very confined deliverables. If brand X has an important event coming up like back to school, a holiday, or the Super Bowl, you would develop campaigns with TV, print, out of home, and radio for specific windows of time. It is a little bit like fashion, where you used to have fall and spring fashion shows and assumed people shop around those times.

A modern brand doesn’t function like that at all. It operates in real time. When working on clients, there are still windows, but on top of that there is day-to-day engagement happening all the time. You are managing social presence every single second of the day. There might be something that happens in the world that you are responding to, something that took off and caught on fire that you didn’t expect, so you are feeding those flames.

It is a much more dynamic process than just launching a campaign, taking a couple weeks off, and then starting to figure out what the next campaign is. It is very much always on. You are thinking about the brand and how to respond to what’s happening in the real world all the time.

Let me ask more about that. We just had Katie Welch on from Rare Beauty, which is Selena Gomez’s beauty brand and much smaller than many of the companies you work with. Their whole thing is, “Look, we are direct-to-consumer. We are doing that ourselves.” It is an 80-person company, and 23 of them are online all day. They are marketing the brand direct-to-consumer on platforms.

Other brands are doing that now too. It seems really important to bring the function of, “We are going to talk to our customers on the internet,” closer to the center of the company. You are describing your agency as doing that for people. What is the split?

There are lots of different models. Sometimes clients do that themselves. Sometimes the CMO or the CEO does it for clients. Oftentimes with founder-led companies, the voice of that brand comes from the founder themselves.

I would say that cuts both ways for those brands.

Yeah, totally. You can feel that sometimes, you know what I mean? So that is one model. You have other models where clients have in-house agencies or in-house social capabilities they manage themselves. We find that, as an agency that has had some success in the past around creating a voice for a brand, owning that voice is actually pretty natural.

We have lots of different dynamics. Sometimes we own the entirety of a brand’s social presence; other times we own the voice and personality while they handle the customer relationship stuff. There are lots of different models.

As your company grows, it is still very valuable to have a partner who understands the voice of a brand really well and can talk about things that are happening in the world outside of your silo. I wouldn’t recommend that for companies at every different size, but once you reach a level of maturation, it is helpful to have a partner that understands what a voice should really sound and operate like.

How do you think about managing the size of Wieden overall? You have these central production teams, and I’m sure you have central business administrative functions, like finance, HR, et cetera. As you get new clients, you have to build new creative teams around them. Do you have a ratio in your head of how big the central team should be as you get more clients? Is that a cost that you manage?

I wouldn’t say we have a goal of managing to a size, ratio, or dollar. I think the challenge for any agency as it scales is that oftentimes agencies are built around the creativity and the talent of their founders or leaders, and have a style that comes directly from that. One of the things we have tried to do at Wieden is create more of a foundational approach that gives people the space and the environment to figure out what their version of creativity looks like.

We don’t say there is a fixed way of doing things. We have goals, we have intentions, and we have things that have worked for us in the past. You find really talented people, give them the space, and then that scales through creating the environment.

That is what we spend a lot of time talking about, the environment of creativity and the culture of creativity. That allows somebody who may have worked somewhere else to come in and say, “Oh, I get it. Now I can apply the Wieden dynamics to this client.” If we can create the cultural foundation and get the right people, it will scale itself. If we were to try to mandate a way of doing things, I think we would be very limited in our upside.

How big is the company?

I think we are 1,600 globally. We have offices all over the world, but we started in Portland, Oregon. We are in New York, Amsterdam, London, Shanghai, Mumbai, Tokyo, and São Paulo.

You talked about the structure of the company a little bit. There is you, the CEO, and you have a chief creative officer. How much time do you get to spend on the creative? How much time do you spend reviewing campaigns and giving notes and all that sort of thing?

That is definitely the best part — and a unique part — of Wieden+Kennedy. That is our whole thing. We get to spend a lot of time sitting and talking about work. We get to sit with teams and with clients and talk about ideas a lot of the day. It’s the reason I love this place and the reason I love my job. If I had to put it in percentages, I would say it is about 40 to 50 percent of the job, which is cool — just sitting and talking to people about ideas.

We say it’s a culture of debate. We try to create as many forums as possible for groups of people, like the team who is working on it day-to-day and by the second, the team who is leading, or us at the office or agency level. We are able to sit and have those debates about what is great about an idea and what can make it better. That’s the sauce a lot of the time.

So here comes the set of Decoder questions. You have been at Wieden for a long time. You were in the planning department, then you were the managing director, and then you ran the New York office. You are also the new CEO after the last founder left, so there is a new team in charge and the founders have exited. They were very famous and set this culture. When I say it’s the coolest ad agency, there is a lot of them in that mix. How do you make decisions? How has it changed as you have risen up in the company, and now that you are in this new role?

My partner, Karl, and I have grown up in close proximity to the founders, Dan [Wieden] and David [Kennedy]. We were very close to everything and the way that they made decisions. I think that is the most formative thing for us. It’s not as if we are coming in off the street and trying to figure out the place; it’s in our DNA.

I have been here longer than anything else I have done in my life, and all my formative years have been at Wieden+Kennedy. I think at a certain point it becomes second nature to have a sense for what Wieden+Kennedy is about and what you are supposed to be upholding. Listen, it’s tricky. We talk about going from Buddha to Buddhism.

Is that a real phrase you use?

Yeah, totally, we use it all the time. Before, you would go to Dan to ask him what to do and he would tell you. That was the access to Buddha. I’m obviously not trying to give an exalted sense of where we are in the totem pole. It’s difficult if you try to operate as if there are rules, and if you try to take the actual words of the founders and apply them, that can be problematic. But if you can apply them as philosophies, then it kind of works.

We know that we are creatively led and we know that we want to make work that people talk about in the world. There are some very general principles that, in today’s context, might mean something different. As long as you hold true to those, then it’s okay. I feel like our job from a decision-making perspective is to tightly hold the philosophies and be light on the rules.

Let me put this into practice for you with a big recent decision. Wieden was famously Bud Light’s agency for a long, long time, with lots of famous commercials. I saw reports in the trade where Bud Light said, “We are going to reopen this account, so you can pitch us again if you want to.” You declined and said, “We are not going to do that. We are walking away.” That is a huge account, and I’m assuming lots of money. How did you make that decision?

Those things aren’t easy. The philosophy is always that you want to work on things where people want what you do. It’s a little bit like dating; you can show up as the person you think somebody wants you to be, or you can be who you are and see if it works.

I think we try to be very cool and accepting of the idea that we may not be the thing that you want, and that’s cool. In their case, they had a new team in place and wanted to go a different direction. It was like, “Oh, that’s cool.” We would rather say, “go forth” and wish them the best of luck, instead of trying to fight and pretend to do something we don’t do.

That is not the model for most client-service-type companies. You are trying to attract business, retain business, and slowly raise your fees over time. I’m not saying that I know anything about client service businesses, but there is a game. That is very different for Wieden, though. It’s known for acting against its revenue interest in favor of its cultural interest. How do you think about that?

Not to bring it back to founders, but founders are very able to retain the capital inside the organization to make decisions like that. You are in a new spot. How do you think about those trade-offs, communicating them, and making sure everyone buys into them?

I have to acknowledge one thing that is a differentiator for us, that helps us make those decisions, is that we are still independent. We are not held by a holding company, which takes the quarterly pressure off of us and allows us to make decisions for the long term. Ultimately, our brand is defined by our creative integrity, and if we start to mess with that, it really erodes what we are and what our long-term success will be.

If we are in a position where our integrity is in jeopardy, and the opportunity to make something really great with a client, it is better for us to say, “all good, let’s focus on the long term,” even though it might have a short-term downside. Being independent instead of being a part of a holding company allows us to make those decisions.

How do we make those decisions? I think our first thing is actually to ask, “Have we done everything that we can to demonstrate what we do, and its value?” You have to reach a point that makes it super clear what it is you do and what you are about, so that at least the decision is clear on both sides. If you have done that, then you just have to be confident and comfortable in that decision.

When you pitch to clients, do you say, “This is who we are, and if you want it, you got it”? There are only so many clients with the budgets to afford you in the world. Are they all just going to rotate through you at some point? Or re you thinking, “Man, I hope there is more competition in DTC because those companies are going to need ad agencies when the competition heats up”? How do you think about growing the business?

This might be totally backwards and may be bad business, but the reality of it is that we don’t think about growing the business, we think about growing the opportunity. There are times when that opportunity is abundant and you have the types of clients and people that are into the creative nature of what we do, and then sometimes it’s a little harder. We know over time that there is huge value in the thing that we do and so we try not to get thirsty.

When we show up in a new business environment, our goal is to communicate who we are as clearly as possible. It is not to convince you of something. If I can get you to understand what we are about, then we will have the safe space for a good decision.

Is there a cap on growth because there aren’t enough companies in the world that want to do interesting, creative stuff? I don’t think so. In fact, I think more and more companies are thinking about their brands and how they show up in the world. They are having to fight for attention in a way we have never seen before, so there is actually more value to what we do. At least for the near term, I don’t lose sleep over the upside potential of our business.

You are talking about being publicly traded versus independent. A lot of your biggest competitors are gigantic public companies: WPP, Omnicom, Publicis, et cetera. They are structured as holding companies. There are boutique ad agencies and the Omnicom monster shows up to eat them.

From what I have heard, the promise is, “We will take all of the boring parts away. We will run your finance and your HR, and you guys can just be creatives. We will have a huge library of creative shops for people to come into. If you don’t like them, you can go to someone else. You will stay inside the holding company to even out the revenue.”

This is the promise. Sometimes it works, sometimes it doesn’t. You still have to retain all of that administrative function. It seems like inside of your job as CEO, you have the big creative partner and it is a creative-led company. A lot of what you must be doing is making sure the business is operating so the creative-led culture can happen. Do you ever think, “Man, I should just flip this thing to one of these companies that will do all the business stuff so I can go back to being a creative”? That is the pitch that they have, at least.

I think that is fairly accurate. First of all, I would say that the administrative work that we do is very little. We try to stay lean and focused on the thing that we do really well, and we partner with people and companies on the things that we don’t do very well.

Interestingly enough, we work with a lot of holding companies. There are clients where we are the creative or strategic lead, and then we have tons of partners that exist as part of holding companies, because there is a bunch of stuff that we do not do. We try to be super honest about what we don’t do and be cool about all the different partners that we are open to working with. Our independence allows us to say, “Holding company X, if you have a direct-marketing arm that’s really good, then great. Let’s work together.”

I think the question would be, “Shouldn’t Wieden+Kennedy start to build out more of those services, because there are revenue opportunities and business growth opportunities there?” The reality of it is, we believe our growth should only come from creative opportunity. If there are more functional marketing services, we are just better off finding partners who do that. We try to stay focused on things we do well and partner with people that can do other things better.

So you think the value is in staying independent for as long as you can?

Yes, definitely. In fact, it is built into our business. This is a little-known thing, but we can’t sell the company. It’s impossible.

Why can’t you sell the company?

It exists within a trust, and Dan has made it clear and legally binding that Wieden won’t be sold.

So no gigantic private equity CEO payday for you? It’s not happening?

No, no, no.

It was worth asking. I feel like I talk to a lot of CEOs on the show, and in the background lurks the gigantic PE payday. We have very literally talked to a CEO where that was the reality for them.

So there are two sides of your business, the creative side and the distribution side. I am very curious how you think the platforms are doing and how the dynamics of advertising on the social platforms are affecting you. The big ones, like Facebook or Snap, are having bad quarters and their businesses are down. I can’t see your financial results, but I do look at the big agency financial results because they are public companies. They seem to be doing great and are very optimistic about next quarter. How are you guys doing?

We are doing well, and we feel bullish on the future. Connecting it to where the social platforms are going, obviously it is no secret that there are a lot of issues around trust and media context and making sure that what I pay for shows up in the right places. Control is part of this, and it is a bit of a battleground. Everybody is trying to figure it out.

From our perspective, we think about it less as paying for all of the digital and social inventory and more as using those platforms as creative opportunities. There are so many interesting things you can do on the big platforms that are integral to gaining the collective consciousness and to making a cultural splash. We think of them less as advertising and revenue businesses and more as a creative canvas.

I think that is one of the things that has been a bit of a misnomer. For a long time, the social strategy was just taking a TV commercial and getting it on the social platforms. But now each social platform is getting more distinctive, for good and for bad. I think there are opportunities for us when we look at it creatively, to really — I don’t want to say exploit — take advantage of it.

Let me focus on the dollars for a minute. I want to ask a lot about the creative and the differences in how you plan for the platforms, but the economy is in a weird place — I don’t know if it’s a recession or not. Ad budgets are the first to go, usually, when things go south. The platform companies that sell the inventory are having bad quarters. However, the publicly traded ad agencies that I can look at are having good quarters and they are optimistic about next quarter. There is a weird dynamic in there that I don’t quite understand. Where do you sit now? Are you having a good quarter and are you optimistic? Are you saying, “Whoa, things are getting weird”?

Good quarter and optimistic, but that is not grounded in anything. Just to be super clear, I don’t want to give a sense that I’m an oracle of any kind. I think the model has changed a bit. The notion that you have to cut ad spending the minute there is a hint of recession is a little different now because of the way media works and the always-on nature of brands. I don’t think you can look at it the same way.

You can’t just be like, “Oh, never mind, I’m just going to not show up in public anymore.” You may not buy the Super Bowl this year, for example, but you still have to show up every day. You have to have something to say and you have to have content to drive that conversation. So it’s just a very different thing.

I think that the always-on nature of brands demands that we stay salient, and that we stay engaged in conversations, even in a recessionary environment. I think the philosophy of how brands show up in difficult economic times might be changing.

Do you think that is why the agencies are doing okay and are optimistic, and the platforms are not doing okay? Because they still need you to stay in the conversation, but maybe you are spending less money with the platforms themselves?

Honestly, I need to think about that more. That is certainly a worthwhile hypothesis, for sure. The demand for content is as high as ever, but do you necessarily need to spend to see that ROI? Maybe not. I’m seeing more clients really looking at their media mix and placing bets, rather than just blanket spending. It’s like looking at the roulette table a little bit differently.

What is the metric you measure? Obviously, you go in and you pitch your values, “Here is Wieden, and we can do all these things for you.” At the end of the day, you’re saying, “We can increase your sales.” Is that the key number at the end of the day for you, that the bottom-line sales go up for clients?

In our world, we deal as much as anything in brand health. I know that sounds like a soft measure, but it is an incredibly important one. The first thing we talk about is, “What is your brand and how will that show up? Is your brand resonating with the audience that you choose?”

If you say, “I want my brand to be more relevant with young people, with Gen Z,” then okay, that is the task and it comes before selling more widgets. “What is your brand about? Why will people talk about that brand? Why will they have an emotional relationship to that brand that will then make me more open to buying products?”

If you just skip that step and go straight to product, you are only as good as the time you are spending. You will benefit from that short-term, but once you turn the faucet off a little bit more, you are not going to see that same benefit. Whereas if you invest in brand, it has a long tail.

So our metric is more brand-related. We talk about brand health, brand engagement, and brand relevance a lot. We want to see the brands of the clients that we work with, and we want to see their brands show up in the lists of most loved brands in the world. It is almost always the case that sales generally follow after.

One of my favorite style of tweets is when people are like, “the brands are at it again,” and it usually just means brands are wilding on Twitter. A lot of what you are describing is brands being more natural and authentic, but in fact, there is a gigantic global company manufacturing that authenticity. Do you think that it is a weird dynamic, that brands are acting more like people?

There is so much nuance, and I won’t get too crazy with this, but you are right. Brands are wilding. The word authenticity is overused — and you and I both know that — but authenticity is everything. When I say brands should show up more like people, I do not love it when brands are mimicking behavior of others online. What I do love is when a brand has a clear sense for what it believes in, and then knows how to show up accordingly.

So, I don’t mean the, “‘Sup, bro?” tweets from clients. That’s cringe all over. What I do mean is that if climate change is a huge pillar of your company, then you should figure out how to use social media to actually advocate for those positions, to garner support and create conversations. It’s about acting like people in the sense of having passions and individual personalities that can come through, not mimicking whatever is happening on Twitter.

So you mentioned Gen Z. This isn’t on my sheet, but I feel like I just have to ask you this.

Let’s go.

You ran the New York office during what I would call the millennial wars. Now you are the global CEO and everyone cares about Gen Z. Are you kind of like, “Yeah, we’re just doing this shit again”? We all lived through the millennial wars.

I don’t know. It doesn’t feel like that. Because advertising is such an of-the-moment industry, it just feels like I am always in some sort of cultural storm.

No one did this around Gen X. I did not get the full weight of the media and advertising industries. They were like, “You’re a slacker, please get a job.” Then the money all showed up and it was like, “We have to think about them, about Gen Z.” That feels new to me in some way.

No, no, no, no. I’m going to challenge that. I feel like as long as I have been in this business, I have heard, “We have to win with Gen X or Gen Z.” That is always the brief. I will say that it does feel like the collective conversation around Gen Z is bigger. It doesn’t feel like it’s just a brief anymore; it feels like it’s a worldview.

I don’t need to say this to you, but there are huge cultural shifts and impacts that are happening right now because of is what is being led by this generation. It is weird to experience it in the workplace with clients or in the media. It has a much larger impact.

Are you just like, “Okay, well, the millennials are old now, so screw them”? That is what seems nuts to me. It’s like, “All right, they are spending their money, they got their brands, they are good. Onto the next!”

That is a great point. I would say that Gen Z gets an outsized share of the conversation in our meetings, et cetera. Dan used to say it’s like you are trying to make work that you can whisper about to somebody else but could be overheard by many others. While whatever you are doing is supposed to resonate deeply and most clearly with the audience that you are talking to, it should feel like it has a broad resonance. You try to tap into these larger cultural zeitgeist issues that everybody can have a perspective on. We are never trying to push anyone away.

Again, I’m Gen X. I am instinctively pushed away. I think famously we are completely resistant to advertising. Isn’t that the old cliche?

That is the cliche.

So, we are talking about young people and about social platforms. We have to talk about TikTok.

Sure.

Every social platform, every company, every media company, is like, “TikTok is the future. Instagram is blowing itself up to be more like TikTok, and YouTube has Shorts, which are just TikToks on YouTube.” How much of your time are you strategically spending on TikTok?

The rise of TikTok is wild and it has only been a short amount of time, but to have the cultural resonance that it does is really crazy. I think the thing that is interesting about TikTok is that it is no longer just a platform, and it has really distinctive behaviors that are attached to it. Right now people are starting to use it for all sorts of different functionalities. It’s clearly not just dance videos; it is a how-to for life in many ways.

In a business that thrives in and can communicate so much through video, it is a great platform. TikTok is undoubtedly a big part of our conversations, because every client wants a social strategy for all platforms. What is different now, though, is that you’ll ask, “What is my TikTok strategy? What is my Insta strategy?” instead of just having a general social strategy. That is a big shift.

Are you just in a lot of meetings where Kendall from Succession is like, “I need some banger TikToks”? Not to be totally reductive, but it sounds like that is occupying more of your time than you would think.

Yes. It comes up a lot. There is a little bit of the “I want a viral video” effect from 10 years ago. “What are we doing in TikTok?” Kendall may or may not be there.

Is that where brands want to spend? They come to you and say, “We need a TikTok strategy. You have your playbook of moves. You have your great creatives to make the stuff.” So then you are running it on TikTok and paying for promotion? You might even have a paid TikTok strategy. Are you saying, “No, it all has to be organic”? Or is it more like, “We are going to make fun, vertical videos and put them on all the platforms”?

Definitely not the latter. The fun, vertical video strategy is deadly at this point. I don’t want to say it smells like an ad, because you can actually feel like an ad on platforms and get some license. You have to really be overt about that. But it can’t smell like the TV ad that you ran, or like the Instagram post that you made that is now on TikTok.

People are super sensitive to understanding how platforms work. If you cannot demonstrate a basic understanding of the differences between the platforms and how they are consumed, then you are donezo. But yes, our clients are starting to talk about spending more on TikTok. That is happening at the moment. Who knows what the future is?

We try to think about that more from an organic perspective than from a paid one, because ultimately that is the content that gets passed around. Ads that are paid, and for the sake of ads, do not. We take huge pride in creating the content that people want to consume, actually seek out, and then share. We focus more on earned. But there is certainly a paid investment that is happening right now.

I take a step back and think about, “Who are the people in this world that can affect the platforms and how they behave?” It is very few people. There is Kim Kardashian, and then there is you. You are the money. You are the one who spends the money for advertising on these platforms. That is the bulk of their revenue.

We have seen it with YouTube. Weird stuff happens on YouTube, there is an adpocalypse, all the advertisers leave, then YouTube changes a policy. Six months later, everyone agrees that everything is fine, maybe nothing has changed. There is a dynamic there where you control a bunch of money that can actually move the platforms in various directions. Do you feel that you have that influence over them? Do you feel that they are listening to your concerns or your clients’ concerns?

It is funny. Even as you were saying “control,” it’s not a feeling I have. Even with sizable investments — and I think this is a good thing, by the way — we don’t have a level of control where we get to dictate the changes in algorithms. And I think that’s right.

You say you think that’s right, but there is another, much older model where you were buying inventory from magazines, TV, and radio. Famously, advertisers did have a lot of control over what those media looked like, for better or worse. The United States did not appear to be spiraling into democratic chaos in that media environment, yet in this one, they do, because no one seems to have any control.

You’re right. There was probably more control in terms of what you got from a spend perspective in traditional media. When we talk about control, governance, and regulation in social media space, I don’t know that it is because we want corporations to be taking control. You know what I mean? I don’t think the answer should be that spend should equate to more control.

I agree. I’m asking this question against my own interests. I only have a career because there are no gatekeepers on the internet. But it strikes me that there are very few strong influences on platform behavior, and money tends to be the strongest influence of all. As you represent your clients, do you say, “YouTube recommendations are out of hand, and the money is not coming to you unless you get it under control”?

No. This might be unique to us because it’s what we do, but our conversations are more about earning influence rather than spending for it. You do that by creating something that people give a shit about. Don’t think you can spend your way to change or control or to an intended outcome.

The platform I have to ask about most distinctly with that is actually still TikTok. The other big platform companies are headquartered in the United States and they have United States-based executives. We know who they are. Adam Mosseri has been on the show, and I feel comfortable making fun of his video where he apologized to everyone about Instagram and said, “Sorry, we’re not changing it.” He will come back on the show and we will talk about it. We can put our media pressure on him, Kim Kardashian can put pressure on him.

TikTok is a black box, right? There is but one executive anyone really knows, Vanessa Pappas. She reports to ByteDance, and ByteDance is an even darker box of opacity. How do you think about that relationship? TikTok is growing and it is where the young people are, so you’re spending money there. However, there is a geopolitical tension with allowing a very opaque Chinese company this much access to Americans’ collective consciousness.

I’m fully cognizant of everything you are saying, but it is a difficult conversation. In the business we are in, you are really trying to follow where people are. By that idea, TikTok is where a lot of people are, and you have to acknowledge that.

Now, in terms of the future of where we go from a regulation perspective and what it means for privacy and information, that is a space that we just continue to watch. If you are just asking me from a business perspective, it is a little harder right now to make a long-term bet when there are those questions that are still outstanding. You just kind of take it day by day.

We have gotten more comfortable with that. If I said to you 30 years ago, “Let’s plan our media spend,” you would have probably been able to have a plan that worked roughly for the next 10 years. Now we are reevaluating where we spend media almost on a weekly basis. That is a huge shift, too. It is because of things like the rise and fall of platforms and obviously the geopolitical, regulatory issues that are all mixed into that.

Do your clients worry about the geopolitical issues with TikTok? Is that something you hear? “Hey, we want to be on TikTok, but we represent an iconic American brand and maybe we shouldn’t associate ourselves with this controversy”?

I would be lying to you if I said that is a conversation that happens. I think maybe it happens in the background, but it’s not something that we sit and talk to clients about a lot right now. Not because there is a laissez-faire nature to it, but I think it is because there is a sense that those issues are being decided in other places, in DC or in other areas.

One of the things I think about a lot when it comes to platforms, access, and organic reach is democracy of access. You can start a new brand where you make toothbrushes, you can then make a banger TikTok, and maybe you will get a bunch of toothbrush customers and you are off to the races.

Wieden+Kennedy just made an amazing Ford Raptor spot, where a Raptor jumps over the desert. It’s a great commercial. I love it. Those companies are not worried about finding more customers to make them aware of the brand. Ford is Ford. The smaller companies have to just start with some sales. Do you think there is a point at which those companies grow up and say, “Actually, we never need an ad agency because we are just going to be good at TikTok”?

You can never say never. The short answer is probably not. Oftentimes when a company starts, the primary battle is for awareness. You have such an ownable difference, that if you can just let people know that you exist, you’re good.

I can’t think of a good example, but think of the 3 Second Abs. You just have to tell people about them. But as the product growth and the category start to mature, that inevitably means competitors. That means new entrants. At which point — and I’m being dismissive for the sake of humor — the founder’s tweets are not going to get you very far.

You are going to need more stuff, and you are going to need to figure out how to have an ownable position for your brand in respect to the category. You are going to then need to be able to talk about why that brand is different and relevant in a lot more spaces, with a lot more nuance. It’s a full-time job.

It is not dissimilar to coming up and monitoring your own finances, but then as you become a big corporation, you need help. It is a service that becomes more applicable and useful as complexity grows. Complexity comes with competition, complexity comes with maturity, and complexity comes with scale. I don’t see companies being like, “Oh, in 10 years, when I am the size of huge company X, I’m still just going to be sitting there doing my TikToks.”

I feel like there are a lot of companies that are feeling that way right now and they might have to scale past it. The thing that really strikes me in all of that, what really enables that, is targeted ad spend. Until recently, if you were a small company, you could buy Facebook ads, target them with extraordinary precision, and measure the conversion to sales with extraordinary precision, all because of the tracking happening.

Apple blocked it famously on iOS, and Facebook says that cost them $10 billion, which is just an amazing result for one settings change on one platform. The argument is that really hurts small business owners. Their ad spend gets more opaque, it’s harder to target, they get less sales, they are firing more money into things, and those are lower-value conversions. Do you feel that at your level too? “Hey, we can’t measure things as well as we were before, so our clients are a little more antsy”?

First of all, the marketing and acquisition at a small business level is very different than large corporations. I’m saying that, knowing you know about that. At a small business level, targeted advertising is not just like an ad, it is a sales tool. It is often a direct conversion.

But I hear about cookiepocalypse from the biggest CMOs in the game.

So then we go to larger corporations. It is less about measurement in terms of advertising effectiveness, and more about being able to track. That is going to make things trickier, because your ability to follow people and have an ongoing conversation will be harder.

Purely from a Wieden+Kennedy perspective, our game is operating at an above-the-line level, where you have ideas that people are talking about and sharing themselves. That conversation does happen, but we still are focusing on the larger idea that is going to drive the business in all aspects of the media sphere.

I will just ask you very directly. I love asking about meetings. You are the CEO of Wieden+Kennedy. The biggest, coolest ad agency in the game. Have you ever walked into a meeting, sat down, and had someone give you a presentation about the word “cookiepocalypse”?

No. No.

Okay. Was it a word other than cookiepocalypse?

No, but cookiepocalypse comes up because it’s a great word.

It’s a great word. I’m just imagining the meeting: Cookiepocalypse Strategy Session.

A very serious meeting. You have the fate of the world and somebody talks about cookiepocalypse. No, it doesn’t come up as often as you may think.

That whole turmoil that is happening between Apple, Google, Facebook, and the ad tech world hasn’t filtered up to you? Is it resting somewhere else in the company?

It is at rest right now in the world of ad tech. It is a huge conversation there. It is less of a conversation in the world of brand and culture, because it is more a performance marketing dynamic than an immediate concern and issue. It’s just different sides of the building.

What data do you look at in your role to say that these campaigns or those creatives are effective? What are you looking at that helps you make those decisions?

You are always trying to cobble together the clearest indicators of genuine engagement. You can’t really look at any metric on its own. You can’t just look at views or likes. You have to look at all of it together, because you want to see proof that the world has seen and is responding to things you have created on behalf of and with your clients. So you look at Twitter trending topics, you look at aggregate views, you just look at it all together.

You are trying to get a sense for, first of all, visibility. How many people have seen exposure? Second, you are trying to look at sentiment. Was it a positive sentiment or negative? By the way, there are instances where negative sentiment is not a bad thing, as long as you have positive sentiment with the right audience. Nike is an example of a client that does that really well, and there is a distinction there. You are looking at general sense of awareness, general sense of engagement, and general sense of sentiment.

Overall, you are constantly tracking the impact the collective body of what you are doing has on the brand. You used to look at brand health once a year, but now — thanks to social metrics, Google Analytics, and all these things — you can look at how people think about your brand in a much more real sense. The world of branding has become less amorphous and less soft because there are real-time metrics that you can keep track of all the time.

Do you feel like your idea of what metrics are important is the same as your clients’? Are you educating big clients like, “Hey, stop counting retweets, and look at this more important metric instead”?

The idea of measurement is one of the bigger conversations we are having. You can look at it like before, whether you agreed with it or not, it was a really simple mechanic of Nielsen, TV, and all your big traditional media. Now that there is lots of data and lots more measurement, the argument is, “What’s useful? What is actually indicative?”

We have a lot of conversations about what the right metrics are. When we start at any new brand platform or campaign, we will sit with our clients and go, “All right, what is success going to look like?” That is probably the question we ask the most and talk about the most. What does success look like? Is it that my mom and my dad see this thing and talk about it? Is it that we move more product X? Is it that we see people talking about the brand more often? Those are all things that are valid, and you just have to get clear agreement on what that looks like. Then you have a greater chance of reaching your goal.

All right, we are coming up on time. Usually we end all these interviews with the ultimate softball question. “What’s next for…” I’m not doing that with you.

Great.

I know a lot of people in the ad world. Our producer, Creighton, used to be in advertising. All of them tell me that everybody who has ever worked in advertising has one horror story of a shoot that just went completely sideways, and that is what you all talk about at the bar. You have a long career in advertising. I want to know your best “shoot that went disaster” story.

Ah, that’s not even fair. My background is in strategic planning, so I don’t really go to shoots.

You have to have one advertising disaster story. Everybody I know has one. I have one, and I don’t even work in advertising.

Wait, what’s yours? You have to tell me yours really quickly. I’m curious.

It’s a long story. This was two CMOs ago. I can’t be blamed for this.

Let’s do this.

We had a series that was sponsored by a company. I was at a John Mulaney show in New York City. It was the Radio City show, so it was the special. I got a call in the middle of the show from somebody freaking out that the logo bug was white instead of red. I was like, “I truly do not care,” hung up, and went back to the John Mulaney show. I found out later that everyone had worked all night to figure it out, because the video was not such that a red bug would have worked, so it was white. I was like, “this is the dumbest thing I’ve ever heard,” but everyone had to scramble all night to fix it.

Wait. All right. Listen. It’s a great question, because if I am being honest, every shoot is a disaster in some way. It’s such a weird thing that we do. We talk with real seriousness about the metrics and we agree and it is all very analytical. Then you find yourself on a set with a grizzly bear and it’s like, “Wait, what” It’s just not even set up to go smoothly.

We had a shoot where the grizzly bear thing is no joke. It was for a client, where there was a live grizzly bear and there’s a very few of them who are actors. On this day, the grizzly bear was lethargic, as one would be — I don’t blame him — and one of the clients suggested that we give it honey and tempt it out of his star trailer. We were like, “Ah, how do I…?”

Like he’s Winnie the Pooh?

Totally. It’s like, “Wait, this is a monstrous grizzly bear! We’re going to just get some honey?” So we had to have this really delicate conversation where I say that this may not be the thing. He refused the idea with, “Are you kidding? Of course you get the honey!” So yeah, that wasn’t great.

All right fine. That’s a great story. You pass the test. What is next for Wieden+Kennedy?

We just spend a ton of time thinking about all the different ways that creativity can manifest itself differently. I think that the canvas has gotten broader. How do you do interesting stuff? What is interesting to us is redefining the way that brands show up.

People are dominating social media, and brands need to act and feel more like people. They need to be able to take more risk and be able to do things that feel more genuinely interesting, to take more of the edges off of what it means to be a corporation. We spend a lot of time just talking about how brands can show up in an entirely different way, no matter how big or small the company is. We get excited about taking our big ideas and creativity and putting them out in the world, and using the canvases that we have to do that in more interesting ways.

That’s great. Neal, thank you so much for coming onto Decoder, and thank you for telling me the story about the client trying to feed the bear honey.

This was really great. Thank you.

Leave a Reply

Your email address will not be published.