As this week’s episode picked up it looked like the initial shock of the Lucky Strike loss had sunk in at SCDP and everyone accepted the reality that changes were inevitable. The initial outrage over Roger’s irresponsible handling of the situation had subsided and Pete decided to stay put at the agency. Lane was back as a stabilizing and pragmatic force directing the actions necessary to streamline agency operations. In addition to the partners’ reassuring clients, Lane was busy assessing the financial impact, evaluating the magnitude of the required staff cut backs, reducing overhead and curtailing expenses. These were necessary steps that had to be taken to survive and secure a line of credit that would insure the cash flow required to meet payroll and pay suppliers. It also meant that the partners had to double down on their commitment to the agency and put up their personal assets as collateral. The partners had to retrench, regroup and reaffirm in order to rebound and rebuild the agency.
Don’t Let My People Go
More than half of an agency’s expense is in direct payroll so absorbing a major loss such as Lucky Strike would require a significant head count reduction. The magnitude of this cutback was heightened at SCDP since there were five highly paid partners who were “fixed costs”. This created a magnified, cascading, negative effect on lower paid employees. The departments with the biggest payrolls were creative and account management and they took the hardest hits. Managers rushed to protect their turf and pet people but there was a natural order of how these cutbacks were implemented. First, protect key senior staff tied to existing business or seen as vital to securing new business. Second, terminate the personnel dedicated to the exiting business. Third, identify all other expendable personnel. As Don put it to Peggy, “Let me know who you can live without”. That scene where Don called Peggy into his office was a classic and very well done. In the span of one minute Peggy’s anxiety and uncertainty gave way to relief and she served up the expendables without hesitation. (Loved the way she played it)
Closed-door termination chats and the despondent, sometimes weeping exodus of terminated staffers were part of the natural ebb and flow of clients moving from one agency to another. On the positive side, very often the newly appointed agency would hire many of the people terminated by the prior agency since they were familiar with the client and could help with the ramp up. It was an unwritten code of conduct in managing these account shifts. I have been on both the receiving and giving end of these situations and it almost always worked out well.
Burned By Tobacco
Whenever an agency looses an account the first new business calls in the roladex are to the ex-client’s competitors. SCDP could boast over 20 years experience in a complicated, regulated category and inside knowledge of a major competitor. Major assets and selling points. When Faye’s boss, Geoffrey Atherton, floated the possibility of an exclusive meeting with Phillip Morris to discuss the launch of a new brand targeted to women, the expectations were extremely high at Sterling Cooper Draper Pryce. The budgets placed behind the launch of a new cigarette brand were huge and the work would be highly visible. They were a natural for the account and it was almost a sure bet. So when the meeting was cancelled the let down was severe and it prompted even more negativity and soul searching among the partners. The fact that the proposed meeting with SCDP was a smoke screen by the client to negotiate a better rate with another agency did little to assuage the partners’ feelings of desperation. As it turned out the new brand in play was Virginia Slims and it was in fact awarded to Leo Burnett and introduced in 1968. Burnett subsequently created one of the most well known and iconic campaigns of that era. “You’ve Come A Long Way, Baby” helped launch a generation of liberated female smokers….an unfortunate health legacy that still lingers today.
Only One Way Out – New Business
An agency cannot cut and downsize its way to prosperity. New business is the lifeblood of an agency and after a major account loss winning new business is even more critical. In addition to the financial benefits, quick new business wins reassure current clients, build agency morale and signal to the industry that the agency is “back”. Often agencies would take smaller accounts and clients that they would not normally consider just to generate some positive PR. The fact that Don was taking a personal meeting with the Heinz client was an indication of just how important this had become. Traditionally the creative director did not get involved in these initial meetings. They were left to the likes of Pete Campbell and Roger Sterling. After the Heinz client told Don to see him in six months he praised Don for his creativity and then suggested that Don “let the account boys chase after new business”.
Somebody Had To Do Something
Through a combination of cleansing his soul, venting frustrations and good old Mad Man savvy and cunning Don took the bull by the horns. He created a full page manifesto ad in the New York Times that broke with the traditional etiquette of the business and took a stand against a category of products and his old client. By making a bold, personal declaration explaining why his agency would no longer accept tobacco accounts, Don positioned SCDP as an independent thinking, principled agency and set it apart from the crowd. The fact that Don’s motivations were not quite so noble was irrelevant. He followed his own advice. “If you don’t like what they’re saying about you, change the conversation”. And boy, did he change the conversation. Don shocked and prodded his partners, rocked the Madison Avenue establishment and put SCDP front and center. As Ken Cosgrove put it, “They’re not talking about Lucky Strike anymore”. As time went by, many agencies went on record that they would no longer take on tobacco accounts. Don was slightly ahead of his time regardless of his motivations.
Don knew that the agency had to make a bold move and that convincing his partners to go along with it would be time consuming and futile. He also reversed his prior feelings that SCDP should not engage in self promotion. A point of view Don emphatically expressed to Peggy after she pulled off her ham promotion stunt. Don’s NY Times manifesto was agency promotion pure and simple. When Don asked Peggy what she thought of the page in the Times Peggy responded with a smile…”I thought you didn’t go in for those kinds of shenanigans”. Don returned the smile. A new era was emerging. Self promotion and stunts took hold in the business in the late ’60s and early ’70′s and the legendary George Lois and the brilliantly flamboyant Jerry Della Femina were masters at it. Don could have learned a lot from them.
The call from the American Cancer Society created a spark in Don and Roger. Since it was a public service account, taking on the business would not add any significant revenue to the agency. However, it could be the shot in the arm that SCDP needed to generate positive buzz and put the agency back in the consideration set for new business. PSA’s have traditionally been where agencies let their creative side shine through to win awards and often lead to new business growth.
As Bert Cooper relinquished his partnership he stated that in Don Draper the agency had “created a monster”. I think that Don’s moves will pay off for SCDP and perhaps the partners should let the monster in Don come out and roar more often.
We will have a great finale to a fantastic season.