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Big musicians flex their muscle with record labels

Talent agency The Firm encourages its musicians to cut out the middle man.

FORTUNE Magazine
By Devin Leonard, Fortune Magazine senior writer
August 7 2006: 11:22 AM EDT

(Fortune Magazine) -- Jeff Kwatinetz, CEO of the Beverly Hills management company known as the Firm, made the rounds to several major record companies with a proposition earlier this year. His client, the rapper-actor Ice Cube, was preparing to record his first album in six years. Did they want to put it out? How could any record company resist?

Ice Cube is a founding father of West Coast gangsta rap. His profanity-laden classics like Lethal Injection and Death Certificate sold millions in the early '90s. Sure, gangsta rap is old school. These days so-called crunk acts like Dem Franchize Boyz are the rage with hip-hop fans.

But Cube hasn't been lounging by the pool reading The Source. He's been producing and starring in movies like "Are We There Yet?" and "Barbershop 2: Back In Business." In short, Ice Cube has become a mass-market brand like Snoop Dogg, another Firm client.

There was a catch. Typically, music companies own the records their artists make. After all, they underwrite the costs of production, marketing, and distribution. But Kwatinetz explained that Ice Cube didn't want a traditional record label deal.

The OG (original gangsta) just wanted a music company to distribute his record. The rapper would personally write the check for his production and marketing costs. Since he was taking all the risk, Ice Cube felt it only fair that he own the music and reap all the profit from its sale in the U.S. Kwatinetz says Universal nearly did the deal, but backed out at the last minute. "They feared Ice Cube's success would show that superstar artists with big management firms wouldn't need record labels," he says. (A Universal spokesman says the discussions never got that far.)

In the end, Kwatinetz got EMI's (Charts) Virgin label to distribute Ice Cube's "Laugh Now, Cry Later." It was a big financial gamble for the rapper, but it paid off. "Laugh Now, Cry Later" debuted at No. 4 on the Billboard 200 in June, and it has sold nearly 500,000 copies worldwide. No, those aren't Lethal Injection numbers. But Ice Cube keeps all the U.S. profits. (EMI gets distribution fees and overseas licensing rights.)

Says Kwatinetz: "We have ring-tone checks coming in. We've licensed music to TV shows. We've licensed music to films. It all goes into his pocket."

The rules of the music business are changing fast in the Internet Age, and no manager is trying harder to exploit this than Kwatinetz. Record companies don't like deals like the one he cut for Ice Cube, and until recently they rarely needed to do them.
Direct-to-consumer distribution

The companies were the gatekeepers between the artists and the audience. If you wanted your video played on MTV, you needed a major label. If you wanted your CD displayed at Tower Records, you had to have a big record company. Sure, the company paid you a big advance. Then it would bill you for production, distribution, and marketing costs using accounting methods that would give people in Hollywood pause.

The record companies are no longer so powerful, because artists have more ways to get their music to fans. Garth Brooks sells his albums exclusively in Wal-Mart (Charts) stores and on the retailer's website.

Radiohead's contract with EMI's Capitol label has expired, and the band is in no rush to sign a new one. In July, Thom Yorke, Radiohead's lead singer, released a solo album, "The Eraser," on an independent label. It was promoted on the homepage of Apple's (Charts) iTunes Music Store and became the No. 2 record on the Billboard 200. Who needs a major label when you can do that?

The success of "Laugh Now, Cry Later" raises the same question. Ice Cube didn't need a record company to get radio play. He's Ice Cube, dammit! He personally courted DJs around the country. The rapper also expanded his fan base on the web.

Rob Stone, founder of Cornerstone Promotion, which Ice Cube and the Firm hired to push the album, says he got DJs to urge listeners to check out the rapper's singles on his MySpace page, and the number of Ice Cube's "friends" climbed from 2,000 to 150,000.

Kwatinetz, 41, is cutting other innovative deals for the Firm's music clients, who include American Idol veterans Kelly Clarkson and Taylor Hicks, Jennifer Lopez, and angst-ridden nu-metalists Korn and Linkin Park.

He was the driving force behind a deal in which EMI and Live Nation--the country's biggest concert promoter - paid Korn $27 million to create a separate corporation that oversees and shares in the profits from sales of the band's records, concert tickets, and merchandise.

Jonathan Davis, the band's dreadlocked lead singer, gets to sit at the table with his record company and his tour promoter and make decisions that increase the value of brand Korn. "It's pretty cool how Jeff rigged it all up," he says.

In July, Kwatinetz announced that the Firm was starting an "artist-friendly music company" that would release albums by clients such as actress-singer Mandy Moore and Army of Anyone, a group comprising the remnants of star '90s grunge acts Stone Temple Pilots and Filter.

The terms are similar to the Ice Cube deal. EMI is financing the venture and will distribute the records. The Firm will handle A&R, marketing, and promotion, and split profits evenly with the artists.

David Munns, vice chairman of EMI Music Worldwide, praises Kwatinetz: "He has a burning desire to reshape our industry." But other music-industry people dismiss Kwatinetz's talk about new business models. They say Ice Cube's record sales are nothing to brag about, and, yes, you still need a major label if you want to get anywhere in this business.

Kwatinetz also has a tendency to speak in grandiose terms about plans that don't always pan out. He says the Firm will be the successor to what he describes as "artist-friendly companies" like MCA, the legendary Hollywood talent agency.

He moved the Firm into the television and film businesses with the purchase in 2002 of Michael Ovitz's Artists Management Group for $12.7 million. That won him clients like Leonardo DiCaprio and Cameron Diaz. But the Firm had some tough financial times after the merger. It has also lost some high-profile acts like the Dixie Chicks. Kwatinetz says the Firm will soon be debt-free and is in "amazing" financial shape. But it's a long way from Lew Wasserman's fabled organization.

Kwatinetz, a Harvard-educated lawyer, says he is trying to diversify the Firm into a company that not only manages music clients but can produce and promote their records and oversee publishing, touring, and merchandising. He says this is what record companies did in the 1960s and '70s.

"The most enduring brands were created in that time," he explains. "Those are the brands that still sell concert tickets, that are still out there selling records, whether it is the Eagles, Pink Floyd, or even Chicago. The last time I saw them they had only two original members, and they were horn players."

Record sales became so profitable that the labels were willing to give up their revenue streams from ticket and T-shirt sales. That was great until Napster came along and CD sales plummeted. Kwatinetz argues that now these same companies are so focused on making their quarterly results from album sales that they can no longer build long-term careers for their artists.

"They are in a death spiral," he says. "The record business will shortly be extinct. But the music business, the business of creating music, will not be - because people love music."

All this raises an interesting question: Why is EMI acting as Kwatinetz's enabler, when he is out to show that big acts don't necessarily need big labels?

To get an answer, I visit David Munns at his office in the Capitol Records building on Hollywood Boulevard. The circular tower is a monument to the industry's glory days: Its hallways are decorated with iconic black-and-white photos of Capitol artists like Frank Sinatra, Duke Ellington, and Nat King Cole, many of whom recorded classic albums in the building. If you love music, this record factory is a wondrous place.

Munns tells me that EMI is making a minimal investment in Kwatinetz's record company. (A source familiar with the deal says EMI has committed up to $10 million, and that's only if the Firm meets certain "performance triggers.") "I believe in portfolio management, and that's what I'm doing here," he says. "I'm not going to start a third frontline label like Capitol or Virgin. It's a bet on Jeff Kwatinetz."

It's a risky bet. If Kwatinetz succeeds, who needs Capitol? Then again, the economy has not been kind to record companies. Could it hurt to be out front for once?
http://money.cnn.com/magazines/fortune/fortune_archive/2006/08/21/8383597/index.htm

MySpace: The Magazine?

MySpace: The Magazine
Social-Networking Site in Talks With 'Nylon' to Create Title

By Nat Ives and Gavin O'malley

Published: August 24, 2006
NEW YORK (AdAge.com) -- Hey MySpace kids: Want to read a magazine? If you answered yes, you may be in luck. MySpace is actively considering whether to launch an ink-on-paper magazine to complement its insanely popular and remarkably valued online property. The editorial mix would likely cover standout MySpace members and their interests, from music to their social scenes.
"We're in the process of modeling it," said an executive privy to the discussions. "Our main concern is the MySpace brand. We don't want to do anything that would hurt the brand."

Familiar partnership
MySpace, which News Corp. bought last year for more than half a billion dollars, is looking at potential business models, the most likely of which would see a MySpace Magazine published by the crew at Nylon magazine, the hip music and fashion title edited by Marvin Scott Jarrett. Nylon and MySpace have worked together before; the two partnered in May to bring the magazine's 7th annual "Music Issue" online with interactive features.

While poor execution or underwhelming response would undermine the site's reputation, the financial risk to MySpace would be low-to-nil if Nylon published the new magazine under a licensing arrangement.

But nothing is certain and MySpace may yet decide to stay out of the print game entirely. Until a verdict is reached, please resume your regularly scheduled social networking online.

http://adage.com/article?article_id=111469

Download fans boost music sales

Download fans boost music sales
Online piracy is not solely responsible for dwindling sales of recorded music, says a report.

Media analysts Screen Digest said broader cultural trends and the debut of DVD had left many consumers with much less to spend on their music collections.

But the boom in sales of music through online portals will help to offset the decline in sales, said the report.

However, the decline will only be halted by 2010, Screen Digest predicts.

Competition time

The firm's analysis of Europe's online music market shows that more than 7% of Europeans own and use a portable music player. In 2004 that figure stood at 2%.

Alongside MP3 player ownership there is a booming interest in music portals such as Napster and Apple's iTunes through which many people buy tracks to put on their player, says the report.

In 2006, Screen Digest predicts that Europeans will spend 280m euros (£189m) buying music online.

The analyst firm expects this market to reach 1.1bn euros by 2010 when the number of portable players owned by Europeans reaches 80m.

Despite the growth, Screen Digest predicts that the overall European music market will continue to lose value until 2010 at the earliest - when sales of downloaded music will have grown enough to offset the losses.

But the expected gradual improvement in sales should not make music makers complacent, warned Dan Cryan, an analyst at Screen Digest, because the growth in online sales will not entirely stop the drop off in total revenues.

Instead, he said, record labels must make the most of new opportunities on mobile phones and on the net to get more music to more people.

Also, he said, music firms must look beyond the traditional duality of single and album and find additional ways to present songs to fans.

The report notes that since 2001 the total European market for recorded music has lost 22% of its value but it warned against blaming piracy for this decline.

It referred to figures from the International Federation of the Phonographic Industry which show that the number of pirated files in circulation online had declined substantially between 2003 and 2005.

The report also said the fact that stores such as HMV and Virgin were branching out into books, mobiles and other media had left less shelf room for CDs.

Perhaps most important was the rising popularity of DVD.

Said the report: "the fact that the decline in physical music sales corresponds to the boom in DVD sales begins to look less like a coincidence and more like a cause."
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/technology/5281272.stm

"Tattoo your Radio Station on Listeners' Brains"

"Tattoo your Radio Station on Listeners' Brains"
An Interview with "Branding Diva" Karen Post
A No-Nonsense Marketing Smart Tip
August 17, 2006

Karen Post is more than a branding expert, she's a "Branding Diva." She's author of the bestselling Brain Tattoos: Creating Unique Brands That Stick in Your Customers' Minds.


In this interview she turns her attention to the challenges of the radio industry.

Here's an excerpt of the interview:

You describe a brand as a “brain tattoo.”

Well, a brain tattoo is a metaphor that I use to help people really understand what a brand is, so that they grasp it is not just the logo or the tagline. It is the absolute sum of everything an organization or an individual or a company does that touches the marketplace. When you think of a tattoo on a body part, it’s put there by choice. Brands are put in your mind by choice, because you either relate to them, they express who you are, or you look at them as a friend. The brain tattoo is a metaphor – the emotional mark that lodges in your mind about someone who tries to get you to connect to what they are selling, whether it’s an idea or a product or a service.

What are your four main components of branding?

First, you must clearly understand why you are here. Is it to make money? Is it to deliver information to a community? Is it to educate people? Why are you here?

Second, you have to list your points of difference. I suggest that you create your own category. To a radio station, you come up with a new name, a new metaphor for what that radio station is so that you are creating your own category. The more distinct you can be, the more effective your marketing dollars will be, and I believe the easier it will be for people to remember you.

When I say “points of difference,” you need to look at the list and say, “Can my competitor copy this easily?” If the answer is yes, then you need to go deeper and try harder and to really do something that would be difficult for someone to copy.

Third, the personality. I don’t mean the personalities on the station, I mean the personality of the brand. If you are introducing one friend to another, you wouldn’t say, “Oh, Joe, he’s got two arms and two legs and brown hair.” You would use adjectives to describe how he behaves. “He’s a risk taker. He’s got a great sense of humor. He’s a little crazy.” Whatever. So think about adjectives that can describe your brand, human-like adjectives, and then do things that are consistent with this personality.

Finally, the promise. That’s the flip side of the purpose. Where the purpose is logical, the promise is emotional. Southwest Airlines is a great example. Their purpose is to provide transportation and shipping, but their promise is they give people the freedom to fly, the freedom to move their product around the country through their shipping.

That’s where the branding begins. Then everything you do must be evaluated against that list. If it’s on brand, go with it. If it’s not, it’s not a good way to spend your money or your time.

Radio stations generally view themselves as bundles of attributes or features. What is the difference between knowing who you are as a brand and tweaking the mix of features and elements?

I think there’s a fine line with tweaking enough so that you’ve got enough revenue being generated based on your programming and trying to please everybody and being a big, diluted brand that really means nothing to anybody.

As business people, we try to not miss one customer. I don’t know that that’s really the best attitude. I think it’s better to focus on a group of people that have like interests and values, then those listeners love you so much that they become ambassadors, evangelists, of your brand. Then they make your job easier.

If you’re involved in an organization that really doesn’t understand the power of the brand – if they’re purely, purely a sales-driven machine - then it’s going to be a tough situation to really implement branding strategies. That’s just like oil and water.

In your book you emphasize using the five senses in a branding effort. Obviously, radio stations are heavy on the ear, but are we effectively using sound in our branding?

Probably not. I owned an ad agency for 20 years in Houston, and if I look back I can remember what radio station press kits looked like. They all pretty much looked the same. There’s an opportunity to stand out and to be distinct. Even how you package your media kit. It can certainly incorporate sound, whether it’s some sort of a CD that’s included or some sort of mechanism that plays sound when the folder opens. Is the paper scented? Is there some sort of specialty item in there that has taste to it? I think there’s a lot of opportunity there. It goes back to being creative and doing things that are different.

You must have a sense, as a listener as well as a branding and marketing professional, about some of the things you like regarding the radio station branding you hear.

I don’t know if you want to ask me that question. I’ll tell you some things that I despise. I cannot stand when DJ’s are paid to ramble on about some product. They make it sound like it’s really coming from their heart, and you know it’s a paid insertion. The average consumer may not get annoyed by that, because they don’t understand how that works, but that annoys me.

I’m very turned off by uncreative radio spots, where people take the old car-salesman approach and they’re just screaming and yelling. People don’t need to scream and yell at me to get me to pay attention to their product. They need to do something that I think is cool or remarkable and is going to enhance my life.

Your book recommends that marketers invest at least 5-10% of their company’s operating budget in brand building. What do you say to those companies who plead poverty?

They’re just full of hot air, basically. Every organization has money to spend on things, or they couldn’t even be in business.

What they need to do is look at where they are spending. I find it hard to believe that there is absolutely no money. Still, I think people have to get creative and take some initiative to infuse the brand into those things they are already spending money on.

Also, I think people use, “We don’t have a budget,” as a lame excuse not to come up with cool ideas. A lot of really big ideas are free or very inexpensive. I think it takes dedication and instilling a culture of creativity in the radio station. I think that’s key.

August 17, 2006 in Marketing Strategy, Podcasts

http://www.hear2.com/2006/08/tattoo_your_rad.html

The Media Choices Just Keep on Coming

Portable Net Radio Ready for Retail
By Frank Barnako
Dow Jones Market Watch

Within the next few weeks, Torian Wireless will begin showing U.S. retailers what you might call a Wi-Fi "Walkman." The InFusion is a portable, battery-powered device which you can tune to any of thousands of Internet radio stations. It also has an FM radio, an audio recorder, and an MP3 player. It does not have a built-in speaker. The retail price could be as low as $229.
George Parthimos, Torian's founder, said inspiration for the device came to him while he was traveling in Europe in 1999. "I wasn't able to hear my football teams from back home in Melbourne," he said. "It wasn't rocket science to come home and work up a design."
A working prototype of the device has been seen publicly. In its debut, at the 2005 Consumer Electronics Show, it was a finalist for the G4TechTV Best of Award. In January, at the 2006 CES, InFusion won an Innovations Honoree award.
"We went to CES with an early model," Parthimos said. "It was kind of dodgy, but we wanted to test the market. We came back, made some modifications, and then three of us went on an eight-country world tour in 21 days to show what we had."
The big holdup, of course, was widely available Internet access. That's less of an issue now. Just this week, Wayport Inc. announced its 10th anniversary and reported it's installed Wi-Fi in more than 7,200 McDonald's restaurants. Numerous other firms have aggressively expanded Wi-Fi to hotels, airports, train stations, and other retailers. Starbucks began deploying Wi-Fi in its stores in 2002.
Parthimos has an agreement with a manufacturer in Malaysia to produce the InFusion. "In a couple of weeks, we'll be getting samples for distributors and we can get into mass production in six to eight weeks."
Availability at retail may be limited to a few boutique stores and his Web site unless a retailer like Best Buy or Circuit City places a big order. "There are a lot of niche players who'd like to take this on." Torian is privately held, has about 20 employees, but no revenues. "We can't fund a mass release ourselves," he said.
http://www.torianwireless.com/

CHAT ROOMS

Hoarders vs. deleters: What your inbox says about you

Hoarders vs. deleters: What your inbox says about you

Jeffrey Zaslow
Wall Street Journal
Aug. 10, 2006 10:52 AM

You are your inbox.

Take a clear-eyed look at how you answer or file each email. Notice what you choose to keep or delete. Consider your anxiety when your inbox is jammed with unanswered messages.

The makeup and tidiness of your inbox is a reflection of your habits, your mental health and, yes, even the way Mom and Dad raised you.

"If you keep your inbox full rather than empty, it may mean you keep your life cluttered in other ways," says psychologist Dave Greenfield, who founded the Center for Internet Behavior in West Hartford, Conn. "Do you cling to the past? Do you have a lot of unfinished business in your life?"

On the other hand, if you obsessively clean your inbox every 10 minutes, you may be so quick to move on that you miss opportunities and ignore nuances. Or your compulsion for order may be sapping your energy from other endeavors, such as your family.

Email addiction, of course, is now a cultural given. But a less-noticed byproduct of that is the impulse of the inbox. Some of us are obsessed with moving every email to an appropriate folder while killing junk "spam" on arrival and making sure Mom knows that we got her email and still love her. Meanwhile, others among us are e-procrastinators - modern-day Scarlett O'Haras who figure we'll deal with old email tomorrow. We're discovering that the disorder in our inboxes mirrors the disorder in our homes, marriages and checkbooks.

A few months ago, Scott Stratten was suffering from what he terms "inbox paralysis." A marketing consultant in Oakville, Ontario, he had 500 old messages in his inbox, all needing responses. "I felt so guilty, I couldn't even bring myself to open my email," he says.

In desperation, he decided to delete all his messages. He then sent an email blast to 400 people on his contact list, telling them a lie. He made up a story that his Internet service provider had informed him that some emails weren't getting through - and that was why friends and clients never heard back from him. "People were very empathetic," he says, "and it allowed me to start fresh."

Mr. Stratten describes what he did as "pure evil," but he also calls it a turning point. He realized he had to find a better way to ease his guilt over not coming through for people. He is now hiring an assistant who will handle his email.

Those who are too nice in other areas of their lives may be more likely to struggle with unwieldy inboxes, says Merlin Mann, creator of 43folders.com, a Web site about personal productivity. Polite people (or those who want to be liked) feel obliged to participate in ping-pong correspondences with chatty friends. They haven't the heart to give anyone the no-response brush-off. But Mr. Mann says such ruthlessness is necessary.

He says he uses a few dozen "templates" to answer email - prewritten form letters in which he inserts a person's name or a personalized comment. He also empties his inbox hourly. "You have to treat your inbox like you treat your mailbox at home," he says. "You wouldn't store your bills inside your mailbox. And leaving spam in your inbox is like leaving garbage in your kitchen."

On the work front, you're most at risk for inbox clutter if you're the type who can't say "no," warns Nancy Flynn, executive director of the ePolicy Institute, a consulting firm. When you're quick to respond with offers of help, "people use email to turn their crisis into your emergency," she says.

In Greensboro, N.C., Internet consultant Wally Bock keeps his inbox down to a manageable few dozen messages. He credits his sense of order to "having disciplined parents who made that a value." Still, he recognizes the downside. Many "Inbox Zero" zealots interrupt their work every time they hear a ping announcing incoming email. "Multitasking is a misnomer," says Mr. Bock. "What you're really doing is switching rapidly between tasks. And every time you switch, you have to start up again. Over the course of a day, you lose a chunk of efficiency."

A saner way to pare down an inbox is to move email into folders - by subject or need for follow-up - and once a week set aside time for inbox housekeeping. That's advice from Marilyn Paul, author of "It's Hard to Make a Difference When You Can't Find Your Keys," a book for the chronically disorganized. She also suggests using the inbox alphabetizing feature, which organizes all email by sender. "That allows you to delete 1,000 emails an hour," she says.

University of Toronto instructor Christina Cavanagh studied hundreds of office workers for her book "Managing Your Email: Thinking Outside the Inbox." One of her subjects, a finance executive, had 10,000 emails in his inbox. She advised him to simply delete the oldest 9,000. Busy people, drowning in email, may have no choice but to kill old messages and suffer the consequences. (Mr. Mann calls this "euthanasia.")

Because "inboxes are metaphors for our lives," Dr. Greenfield says, there's no cure-all solution to inbox management. We're all too different. But he believes an awareness of our inbox behavior can help us better understand other areas of our lives.

"If you have 1,000 emails in your inbox, it may mean you don't want to miss an opportunity, but there are things you can't pull the trigger on," Dr. Greenfield says. "If you have only 10 emails in your inbox, you may be pulling the trigger too fast and missing the richness of life."

Thoughts For The Day

A mind once expanded can never return to its original dimensions.

Anne Hathaway: 1556-1623

The greatest derangement of the mind is to believe in something because one wishes it to be so.

Louis Pasteur

Employment and Wage Effects of Radio Consolidation

Employment and Wage Effects of Radio Consolidation
By Peter DiCola, Research Director, Future of Music Coalition
August 9, 2006
Using data from the Occupational Employment Survey of the U.S. Bureau of Labor Statistics, FMC Research Director Peter DiCola examines the effects of radio consolidation on employment and wages for radio announcers, news reporters, and broadcast technicians. The report finds that, comparing figures across metropolitan areas, an increase in the number of stations per owner within a metropolitan area was associated with both lower employment levels and lower wages during the years 1996 to 2003. The study also shows that the job losses in radio impede federal policy mandates to promote localism and diversity in media.
You can down load a PDF of the 30 page report at their website.

http://www.futureofmusic.org/research/index.cfm

It's Never too Early to Get Ready for Snow

New Patented 9" Dual Blade Ice Scraper. A natural scraping motion creates a double blade that cleans frost and snow quickly and completely in one pass.


The large imprint area and low price make this item a perfect Winter give-away.
1000 Pieces/One Color Imprint
$.47
Only additional cost is freight
$.19 for each additional color

GOOD NEWS. Tattoo Special extended through August!!

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Lee Clow: The Ad Industry's Creative Godfather

Lee Clow: The Ad Industry's Creative Godfather
And at 62, a Legend Still in the Making
By Alice Z. Cuneo

Published: July 30, 2006

SAN FRANCISCO (AdAge.com) -- In 2005, during the annual madness of Cannes, word got out that TBWA chief Jean Marie Dru was going to make a break for Havas. Lee Clow hopped a plane to Nice, where he was met at the airport by Mr. Dru, with whom he'd forged a close bond.
Creative mastermind
"He came to me as a friend and a brother," said Mr. Dru, who describes Mr. Clow as "somebody more stubborn than me." He wouldn't say, however, what the agency's creative mastermind said to persuade him to stay.

Mr. Clow, however, divulged the bones of the conversation: "I told him we could walk away with something that can be a very triumphant end to a great career," Mr. Clow said. In short, they could meet Jay Chiat's challenge -- a challenge that has become an eternal conundrum in the world of huge, consolidated agencies: Become big without being bad.

In a sense, the conversation between the two men was a mission statement for the last chapter in Mr. Clow's storied career. Could he oversee the addition of once-dreaded package-goods marketers to the TBWA roster without the agency becoming a bureaucracy or a commoditized production line for cookie-cutter creative?

Media Arts Lab
The answer appears to be yes. Mr. Clow, Mr. Dru and the rest of the agency's brain trust had framed a plan to reinvent the agency with a new concept called the Media Arts Lab, and even back in 2005, Mr. Clow already thought it was working. "I basically told him we were pulling it off," Mr. Clow said.

And, showing off a pragmatic side that complements his considerable creative skills, he also cautioned Mr. Dru that he'd find a snake pit at Havas and would be "used by Havas and [Vincent] Bollore."

Yes, Mr. Clow still shows up at the office in shorts and sandals, the boyish uniform of his Malibu surfer youth. But the fact remains that, at 62 (he'll be 63 on Aug. 3), one of the industry's preeminent creative minds is approaching retirement age. And while he's not one to talk about hanging up his surfboard, or relinquishing his title, the chairman-chief creative officer of TBWA Worldwide has shown signs he's thinking legacy.

Chips on their shoulders
For many years, the surest death knell for a Chiat/Day creative was to be viewed as -- or worse, actually designated by press release -- Lee Clow's heir apparent. The half dozen or so creatives in that league "ultimately left with a chip on their shoulder," said one high-ranking TBWA creative.

But that's changed. Chuck McBride, who works out of the San Francisco office, has the title of North American creative director, and Rob Schwartz took over the Nissan account in Playa del Rey. Earlier this year, Mr. Clow took the stage in a tux at a Los Angeles advertising dinner honoring Mr. Schwartz as "Leader of the Year." Mr. Clow and a bikini-clad babe took the stage to present Mr. Schwartz with a handmade surfboard.

To many in the audience, the eye-welling presentation felt almost like a ceremonial changing of the guard. Not so, Mr. Clow said. The surfboards have been handed out to many. And Mr. McBride, among those mentioned as a Lee Clow successor, believes TBWA will never be able to roll out a replacement. "Nobody's going to replace Lee, Dan [Wieden], Jeff [Goodby] and Rich [Silverstein], [John] Hegarty, [Phil] Dusenberry," Mr. McBride said.

Madison Avenue legends
Mr. Clow's account of the Dru affair, though, is one of the rare times he has publicly acknowledged thinking about the end of a career that started in 1968. The past few decades have put him in league with Madison Avenue legends Ogilvy, Bernbach and Dusenberry, and seen him amass a portfolio that includes the Energizer Bunny, the Taco Bell Chihuahua and, of course, the Apple "1984" spot, arguably the greatest of the 20th century.

All of that work was created at what is now TBWA/Chiat/Day, one of few agencies at the time that would allow Mr. Clow to remain close to one of his true passions, surfing. Unwilling to move to New York after graduating from art school, he joined N.W. Ayer's Los Angeles office in 1968.

Then he heard about Jay Chiat and Guy Day's agency in Los Angeles, and undertook one of the most pivotal ad campaigns of his career: a two-year self-promotion he dubbed "Hire the Hairy." He put stickers in parking places at the shop. He put a beard on the jack in a jack-in-the-box and sent it to the agency. "Guerilla marketing before its time," he said.

1984 L.A. Olympics
It wasn't the last time Mr. Clow fired up a guerilla effort -- he was the architect of the supersized Nike billboards for the 1984 Los Angeles Olympics, which jump-started the ambush movement -- nor was it the first time he had turned on the marketing charm for a personal crusade.

Back in 1963, he supported his surfer-dude lifestyle by working in a bowling alley. There he met his wife, Ilene, a woman 14 years older than he, who had two children. "She was very cute, and I would hang around and take her out for coffee. I wasn't old enough to drink," he said. Some acquaintances, though, didn't think the match was a good idea. "I am an obsessive person, and when I find something I want to do, I make it happen. I didn't listen to [them]."

For 25 years, Mr. Clow and Mr. Chiat created a fresh, upbeat California style of advertising perhaps epitomized by their 1985 spots for California Cooler, a wine and fruit drink, filmed at Mr. Clow's surfing spot.

"I consider myself the luckiest person on the planet," Mr. Clow said. "Having something I care that much about is a blessing."

Smartest, simplest marketing idea
At work, Mr. Clow stands at a large bench where art can be spread out. From there, he practices what has become a hallmark of West Coast creative leadership: a hands-on approach he hopes will serve as an example and inspiration to those around him. His genius, contemporaries say, is to synthesize, to look at a wall full of creative ideas sketched out on thin paper, and extract the smartest, simplest marketing idea, whether it be one of his own, such as "Dogs Rule," for Pedigree, or one thought up by the staff, such as "Impossible is Nothing" for Adidas and "Shift" for Nissan.

In the early 1980s, Mr. Chiat introduced Mr. Clow to Steve Jobs. That led to a collaboration that spawned some of advertising's most celebrated work: the "1984" spot for the Mac; the iPod silhouettes; and, Mr. Clow's personal favorite from his entire portfolio, the 1997 "Here's to the Crazy Ones."

The impact of the Apple work, the "1984" spot in particular, still reverberates.

Myth of the Super Bowl commercial
"He created the myth of the Super Bowl commercial. ... It's still the gold standard. Generations of people have been trying to do the same thing. It's impossible," said Alex Bogusky, executive creative director of today's hottest shop, Crispin Porter & Bogusky. "Advertising was one thing. After Lee, advertising was another thing."

Of course, not every piece of creative Mr. Clow touched in his career has been a resounding success. He was, in effect, taken off the Nissan account after the expensive campaign tagged "Life's a journey. Enjoy the ride" (the Mr. K spots). And Taco Bell left after the popular "Yo Quiero" effort failed to ring up enough people-food sales.

Although they worked side by side, Mr. Clow acknowledges he and Mr. Chiat frequently didn't speak. Fred Goldberg, a retired former Chiat/Day executive, was present when the Chiat team gathered before its final meeting with Steve Jobs for approval of the "1984" commercial. "Jay arrived from New York in a surly mood," Mr. Goldberg said, and proceeded to vent at everyone, including Mr. Clow. "Lee took a lot of shit from Jay. Lee is a saint."

Management by 'nudging'
Sainthood, naturally, is in the eye of the beholder. Mr. Clow has been known to mix it up and has a reputation among some younger creatives as "mean." Others, however, take his outbursts as "passion" for good creative that are not to be taken personally. Still others say Mr. Clow manages by "nudging," placing a stack of ads on a desk as a "hint" of what he likes or wishes the agency had done. "I tell people what I expect of them, and they figure it out by themselves," he said.

A conductor's baton given to him as a gift is cause for reflection. "I was a pretty good soloist when I joined the orchestra," he said. "But I think I'm a much better conductor than I was a soloist. If we can make beautiful music, that makes me happy. ... And different people end up getting to do the solos and get the standing ovations. ... I'd love to have the most famous virtuosos on the planet working in this network."

That's why he's not planning on giving up the podium just yet. "Why would I want to retire when I get to hang out with very smart young people who think I know something and ask my advice?"

Oddly enough, one such young person, the guy who just might be the true heir to the Clow surfboard, never actually worked for him. Mr. Bogusky said he attended a seminar once where Mr. Clow spoke. While Mr. Clow was walking around in flip-flops with a backpack, Mr. Bogusky was in a suit. "He was a surfer dude, and I was a surfer pretending to be a businessman." When other speakers talked about battling with clients, Mr. Bogusky said he became depressed and decided, "I can't do this." But when Mr. Clow talked about how his agency had huge garbage bins of work that had been ditched because it didn't make the grade, Mr. Bogusky realized: "I can work hard. That I can do."

'Terrfied of Mr. Clow'
He was "always terrified" of Mr. Clow, he said, even after Crispin won the Grand Prix at Cannes. Recently he has gotten to know him a little bit more, however, and last year did a one-on-one interview with him that was filmed by Creativity magazine (and is available at Adcritic.com).

In that interview Mr. Clow talks about his developing legacy project -- the Media Arts Lab -- which is essentially a way of seeing the agency as a participant in consumer culture rather than as a creator of commercials. "He's changed the business over and over, and it would be foolish to think he can't do it again," Mr. Bogusky said.

Yet, at the end of the typical Lee Clow day, there's a simpler goal: Making ads that don't suck. "I've never wanted another job and never wanted another wife," he said. "Maybe I'm rare and odd. For some reason, I knew this was where I wanted to be and where I wanted to stay."
http://adage.com/article?article_id=110812

Five Words to Never Use in an Ad

Five Words to Never Use in an Ad
Forget the meaningless cliches and empty promises. What really matters is what customers take away about a business
By Steve McKee

Google the term "magic advertising words" and you'll instantly get over 8 million results. But caveat emptor -- don't buy into everything you read, because your prospective buyer certainly won't.

From the time marketing began, there has never been a shortage of self-appointed experts who claim to have identified the words that will unlock your customers' wallets. In the Internet age their advice is even easier to come by. They promise that words such as "you," "guarantee," "easy," "limited-time," and the old standby, "free," will generate surefire results. If only it were that simple.

As a smart business person, you probably know that there are no such things as magic words, particularly in a culture that has been saturated with advertising. But there's something else you should know: Not only do magic advertising words not exist, several of them actually work against you. And chances are, you're using at least one of them in your advertising now.

Brace yourself. Here are five of the advertising words you should never use:

Quality
This may be the most overused word in advertising, which is the primary reason why you should stay away from it. What exactly does "quality" mean? In a Lexus, it may mean hand-crafted finishes, supple seats, or a smooth ride. In a Hyundai, it's more about the extended warranty than anything.

The point is this: every product worth buying is a quality product. It may be high-priced quality or it may be low-priced quality, but it's quality either way. That means every company believes it can use the word "quality" in its advertising. Too many have, and as a result, now it has become just seven empty letters.

Value
Like quality, value has been ruined by overuse. Go back to the Lexus and the Hyundai examples -- which car is the better value? It depends -- on the buyer, on the purchase occasion, and on what features and benefits value is being judged. Both vehicles are good values depending on the purchase context.

Or take another industry, retail: Wal-Mart provides good value, but so does Tiffany. Value, like quality, is in the eye of the beholder, and every product or service has its own value equation. Saying "we provide the best value" is, therefore, virtually meaningless.

Service
Have you ever heard an ad promising lousy service? Of course not, which is the reason why claiming good service just falls on deaf ears. It's funny, but the companies that make the claim of good service the most tend to be those that deliver it the least.

Of course, most organizations do have sincere intentions to provide outstanding service and commonly cite Nordstrom as the example to which they aspire. But Nordstrom is Nordstrom for a reason -- the company's entire culture and identity is built around the service concept. Nordstrom is the exception, most companies can't get there from here, and simply promising great service won't make it happen.

Caring
Do you really believe your company cares more about your customers than your competition does? It may feel good to say so, but the claim flies in the face of common sense. If your competitors didn't care about their customers, they couldn't stay in business.

It's particularly easy for service companies to get caught up in the "caring" self-deceit because they don't sell a tangible product. But to say "we care more" in an ad presumes that your competitors care less, which is ascribing motivations to them that can't be proven. Consumers know this and are not only hesitant to believe your claim, they are likely to consider it bad form.

The above four words all fail for essentially the same reasons. Not only are they overused, they're based on variables that will be different for everyone. There's a quality/value/service/caring continuum in each person's mind for every purchase occasion, and it is a continually moving target.

But the fifth word is different. The fifth word doesn't work precisely because it's not variable. The fifth word is binary.

Integrity
A company either has integrity or it doesn't. It's either honest or it isn't. And most people give companies the benefit of the doubt in believing that they operate with integrity. When a company talks about integrity in its advertising it's for one of two reasons, neither one of them good: They're either trying to cover up some lack of integrity (which never works) or they're implying they live by a higher standard than their competition. That's impolite, to say the least. Every company needs to have integrity. No company needs to advertise it.

Do you want your customers and prospects to view your products and services as being high quality and of good value? Of course. Do you want them to appreciate your caring service and strong integrity? Absolutely. But every company wants those things. Those that win the hearts and minds of consumers don't talk the talk, they walk the walk.

What you think about your company doesn't matter. All that matters is what your customers and prospects think. The next time you're tempted to use one of these five words in an ad, stop and ask if there's a better way to get the message across. Using common words that have become empty cliches is a shortcut to nowhere. Just because you sell it doesn't mean people will buy it.

McKee is president of McKee Wallwork Cleveland Advertising, an ad agency specializing in working with fast-growth companies and businesses whose ad budgets are under $10 million

http://www.businessweek.com/smallbiz/content/jun2006/
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