WE MADE THE TRADE.€¦ · Meetings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel R Group Meetings • Incentive Travel • Corporate Events • Resorts

Illustration by Taylor Callery for Ad Age12 • JUNE 9, 2014 ADVERTISING AGE

MARKETING IS A WHOLE NEW

GAMEThe ad maverick has lostits edge and is using bold

tactics to get it back. Still, it won’t be easy

By Ann-Christine Diazand Maureen Morrison

FOR

APPLE,

CONTINUED ON P. 14

JUNE 9, 2014 • 13ADVERTISING AGE

• Hotel Rooms • Group Meetings • Incentive Travel • Corporate Events • ReCruises • Hotel Rooms • Group Meetings • Incentive Travel • Corporate EveResorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travel • CorpEvents • Resorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • Incent• Corporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • InTravel • Corporate Events • Resorts • Cruises • Hotel Rooms • Group MeetiIncentive Travel • Corporate Events • Resorts • Cruises • Hotel Rooms • Groings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel RoomMeetings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel R• Group Meetings • Incentive Travel • Corporate Events • Resorts • Cruises Rooms • Group Meetings • Incentive Travel • Corporate Events • Resorts • C• Hotel Rooms • Group Meetings • Incentive Travel • Corporate Events • ReCruises • Hotel Rooms • Group Meetings • Incentive Travel • Corporate EveResorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travel • CorpEvents • Resorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • Incent• Corporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • InTravel • Corporate Events • Resorts • Cruises • Hotel Rooms • Group MeetiIncentive Travel • Corporate Events • Resorts • Cruises • Hotel Rooms • Groings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel RoomMeetings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel R• Group Meetings • Incentive Travel • Corporate Events • Resorts • Cruises Rooms • Group Meetings • Incentive Travel • Corporate Events • Resorts • C• Hotel Rooms • Group Meetings • Incentive Travel • Corporate Events • ReCruises • Hotel Rooms • Group Meetings • Incentive Travel • Corporate EveResorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travel • CorpEvents • Resorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • Incent• Corporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • InTravel • Corporate Events • Resorts • Cruises • Hotel Rooms • Group MeetiIncentive Travel • Corporate Events • Resorts • Cruises • Hotel Rooms • Groings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel RoomMeetings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel R• Group Meetings • Incentive Travel • Corporate Events • Resorts • Cruises Rooms • Group Meetings • Incentive Travel • Corporate Events • Resorts • C• Hotel Rooms • Group Meetings • Incentive Travel • Corporate Events • ReCruises • Hotel Rooms • Group Meetings • Incentive Travel • Corporate EveResorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travel • CorpEvents • Resorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • Incent• Corporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • InTravel • Corporate Events • Resorts • Cruises • Hotel Rooms • Group MeetiIncentive Travel • Corporate Events • Resorts • Cruises • Hotel Rooms • Groings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel RoomMeetings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel R• Group Meetings • Incentive Travel • Corporate Events • Resorts • Cruises Rooms • Group Meetings • Incentive Travel • Corporate Events • Resorts • C• Hotel Rooms • Group Meetings • Incentive Travel • Corporate Events • ReCruises • Hotel Rooms • Group Meetings • Incentive Travel • Corporate EveResorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travel • CorpEvents • Resorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • Incent• Corporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • InTravel • Corporate Events • Resorts • Cruises • Hotel Rooms • Group MeetiIncentive Travel • Corporate Events • Resorts • Cruises • Hotel Rooms • Groings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel RoomMeetings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel R• Group Meetings • Incentive Travel • Corporate Events • Resorts • Cruises Rooms • Group Meetings • Incentive Travel • Corporate Events • Resorts • C• Hotel Rooms • Group Meetings • Incentive Travel • Corporate Events • ReCruises • Hotel Rooms • Group Meetings • Incentive Travel • Corporate EveResorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travel • CorpEvents • Resorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • Incent• Corporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • InTravel • Corporate Events • Resorts • Cruises • Hotel Rooms • Group MeetiIncentive Travel • Corporate Events • Resorts • Cruises • Hotel Rooms • Groings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel RoomMeetings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel R• Group Meetings • Incentive Travel • Corporate Events • Resorts • Cruises Rooms • Group Meetings • Incentive Travel • Corporate Events • Resorts • C• Hotel Rooms • Group Meetings • Incentive Travel • Corporate Events • ReCruises • Hotel Rooms • Group Meetings • Incentive Travel • Corporate EveResorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travel • CorpEvents • Resorts • Cruises • Hotel Rooms • Group Meetings • Incentive Travporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • Incent• Corporate Events • Resorts • Cruises • Hotel Rooms • Group Meetings • InTravel • Corporate Events • Resorts • Cruises • Hotel Rooms • Group MeetiIncentive Travel • Corporate Events • Resorts • Cruises • Hotel Rooms • Groings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel RoomMeetings • Incentive Travel • Corporate Events • Resorts • Cruises • Hotel RGroup Meetings • Incentive Travel • Corporate Events • Resorts • Cruises

Truckloads of fruit for blocks of hotel rooms?

WE MADE THE TRADE.

activeinternational.comActivate your assets.

TBWA/MEDIA ARTS LAB was presenting freshwork to its signature client when the Apple executive across the tablestopped the proceedings and handed over another idea, saying sim-ply, “We like this better.”

The favored ad was created by a rival agency: Apple’s in-house shop.Recounted by a creative who has worked on the brand recently,

it’s a scene that would have been unfathomable before the death ofApple’s creative heart and soul, Steve Jobs, roughly two-and-a-halfyears ago. But today Apple is thinking differently about its approachto advertising and marketing. Very differently.

Amid criticisms that it has failed to innovate, Apple is increasing-ly taking marketing into its own hands. It’s madly building an inter-nal agency that it’s telling recruits will eventually number 1,000—thesize of Grey Advertising. It’s pitting TBWA/MAL against this internalagency with “jump balls” to mine the best creative ideas, a controver-sial tactic with outside agencies, let alone an internal one. It’s goingafter some of adland’s boldest-faced names to staff its in-house shop—in some cases, it’s even poached executives from TBWA/MAL. And,in what once would have been seen as a sacrilegious breach of theApple-MAL bond, it’s been inviting some of the ad industry’s topshops to pitch on major projects.

But Apple’s grand ambitions so far appear to be just that. Thecompany that only a decade ago was the creative standard is findinga frosty reception in some creative corners. “I don’t feel that energyfrom Apple,” said one top agency exec who was approached for apost. “The revolution has come and gone, and I’m not sure a job atApple would be a creative opportunity. If I were going to go brand-side, there are a lot more interesting companies I’d rather work for,like Coke or Pepsi.”

Apple and TBWA/MAL declined to comment for this story. Butinterviews with at least two dozen current and former employees ofApple, TBWA/MAL, ad-industry professionals approached by thecompany and those who have worked with Apple reveal a powerfulbrand searching to regain its creative edge.

Once the ad industry’s maverick, the company has struggled todeliver a campaign that lives up to the “Think Different” legacy,marred by missteps like the Olympics 2012 “Genius Bar” ads thatquickly got pulled.

Meanwhile, other tech marketers have eclipsed Apple with theircreativity and cojones, a fact not lost on the Cupertino company.

An email to TBWA/MAL President James Vincent from AppleSenior-VP Global Marketing Phil Schiller uncovered during the much-publicized patent lawsuit between the tech giant and rival Samsungsaid: “I watched the Samsung pre-Super Bowl ad that launched today.It’s pretty good and I can’t help but think these guys are feeling it (likean athlete that can’t miss because they are in a zone), while we strug-gle to nail a compelling brief on iPhone.”

The words could be a call to arms or represent a certified market-ing creative crisis. Meanwhile, in addition to surging Samsung,Google has proved to be one of advertising’s most-emulated story-tellers, with traditional ads and online experiences that deftly weavehumanity into its brand message. In May, Google kicked Apple out ofthe top spot in BrandZ’s annual ranking of Most Valuable Globalbrands, a position Apple held for three consecutive years.

Apple clearly sees the urgency.

DIALING NUMBERSIn April, a Wall Street Journal article during the patent dispute

between Apple and Samsung brought to light an early 2013 email

‘INTENTION’TBWA/MAL bounced back last year with a sophisticated but pointed jab

at the company’s competitors, who are too busy “building everything” to everreally perfect one thing.

14 • JUNE 9, 2014 ADVERTISING AGE

from Mr. Schiller to CEO Tim Cook that said the brand “may need to start a searchfor a new agency. …We are not getting what we need from them and haven’t beenin a while.”

Ad Age learned that since at least the beginning of 2013, Apple has been call-ing adland’s hottest shops to work on various projects. One of those was to SanFrancisco-based Pereira & O’Dell, which conceived the Emmy- and multipleCannes-Lion-winning “Beauty Inside” social film for Intel/Toshiba. According toCo-Founder/Chief Creative Officer PJ Pereira, Apple reached out to his agency overthe past year for two projects, at least one of which would have been long-term.“We turned them down because we have relationships with both Intel/Toshiba andSkype (owned by Microsoft),” he said. People close to the situation say that Applecontinues to call other top creative agencies in on projects.

In April, the brand went on a digital hiring spree and added four shops to itsroster: WPP’s AKQA, Interpublic’s Huge and indie agencies Area 17 and Kettle.Under Mr. Jobs’ watch, the brand was famously “traditionalist” when it came toadvertising, especially for a tech company. For the most part, its standout workwas confined to TV and print (see Ad Age, April 9, 2014). The addition of theshops suggests the brand is trying to bring more creativity and innovation to itsdigital marketing.

Last fall, Ad Age reported that Apple was looking to build out its in-house teamto 600 people from 300. Today, according to a high-level agency exec recentlyapproached, Apple has upped that number to a massive 1,000. By comparison,Google’s lauded Creative Lab, which steers some of the brand’s most high-profilework, is said to have fewer than 100 people, not all of whom are full-timers.Google’s marketing, however, isn’t done solely out of the lab.

To staff its internal agency, Apple is casting its net wide. One senior agencyexec noted that within the same six-month period of being contacted by Apple, anumber of other senior creative execs at both this person’s agency and othershops had gotten calls. The broad outreach gave the impression “they were justdialing numbers.” Another upper-level agency exec was unclear as to how manyposts Apple has been trying to fill, but said, “All I know is all my talented friendshave been approached. Apple has its sight on some of the best talent.”

For various reasons, however, top talent has resisted the pitch. In addition to Apple’s flagging creative reputation, another recruiting hurdle

for the company is its cost-prohibitive location. “Do you know how expensiveCupertino is?” one exec said. “Just run property values, and even on an Applesalary, it would be tough.”

To be sure, Apple still has plenty of appeal. “There are probably only a hand-

ful of places that have that level of expectation of quality and can afford to paypeople to do work to make it successful,” said another exec contacted by Applerecruitment.

The brand has managed to snag a few top names. Among them is BillDavenport, the Wieden & Kennedy partner who helped to launch the agency’sentertainment unit, W&K Entertainment, and earlier in his career steered notableprojects for Levi’s and Nike, including the latter’s famous “Bo Knows” spot. It’snot yet known what role he will play, but people close to the situation say he washired to lead in-house production. Executives close to the business said Apple has

been beefing up production beyond Mr.Davenport and is looking to create a full-function production department capableof handling not just creative but business-side affairs.

In April, branding agency Wolff Olins’Global CEO Karl Heiselman told Ad Age hewould be joining Apple in a marketing-communications role. Mr. Heiselman hadbeen a design contractor at Apple in the1990s before Mr. Jobs returned to revitalizethe company. Another addition is TylerWhisnand, a former Wieden & Kennedy,Portland, creative director who worked onnotable campaigns such as Levi’s “GoForth” and Nike’s award-winning“Chalkbot.” People familiar with the situa-tion say Larry Frey, another W&K creativealum who co-founded 180 Amsterdam andis also a commercial director, has joined

the in-house team. In March of this year, Brian Rekasis joined as director, worldwide marketing

and communications. He recently served as senior VP-exec producer at integrat-ed-production company B-Reel, a former Creativity Production Company of theYear known for its sophisticated multiplatform campaigns for marketers such asIntel, Doritos and Google.

Meanwhile, Apple has poached a number of former MAL staffers, includingCreative Directors Hector Muelas and Ricardo Viramontes, and Creative DirectorLarry Corwin, who previously held creative director positions at Google, BBH,

CONTINUED ON P. 16

CONTINUED FROM P. 13

‘PENCIL’ Created in-house, this ad used a clever twist to highlight

the features of the new iPad Air.

APPLE MARKETING

“ALL MY TALENTED FRIENDS

HAVE BEENAPPROACHED.APPLE HAS ITSSIGHT ON SOME

OF THE BEST TALENT.”

IS A WHOLE NEW GAME

20140609-NEWS--0014,0016-NAT-CCI-AA_-- 6/5/2014 9:43 PM Page 1

16 • JUNE 9, 2014 ADVERTISING AGE

BBDO and Goodby Silverstein & Partners. Apple has tapped former Madison Avenue recruiters to ramp up its

head-hunting efforts. Among them, Linda Waste, a senior recruiting managerwho previously worked at DDB Chicago, Energy BBDO and Euro RSCG; and sen-ior recruiter Greg Christman, former talent director at TBWA/MAL and recruiterat Google Creative Lab.

At the same time, according to people familiar with the situation, TBWA/MALhas become more aggressive in its own recruiting.

While hiring efforts are in full force, Apple has changed its approach to gettingcreative work as it continues to increase its ad spending. In 2013, its advertisingbudget rose to $1.1 billion, up from $1 billion in 2012 and $933 million in 2011.

Much of the purview over Apple advertising lies with Hiroki Asai, who came upat the company through package design—and is said by one creative to be “the cre-ative director of all things internal” who has “really evolved into this very powerfulperson” at Apple. But his job is more complicated now than it once was, given theexpansion of the internal agency and subsequent shootouts. In addition to oversee-ing much (if not all) creative internally, he is reportedly also one of the main clientcontacts for TBWA/MAL. “He’s kind of judge and jury,” said the creative.

‘MOST DISRESPECTFUL THING’Outside of controversial emails, Mr. Schiller plays a leading role as well. People

familiar with the situation say it’s under him that Apple has introduced—or at leastintensified—a competitive dynamic between its in-house team and TBWA/MALthrough creative shootouts. That’s the type of warfare typically found betweencompeting shops, not agency and client.

One creative who worked for Apple said the shootouts began last summerwhen the company was prepping to launch the iPhone 5C. This creative notedthat it appeared as though the shootouts would continue, but not every projectwill go that route. For instance, Apple’s holiday ad, featuring a loner teen whoseems to pull away from his family’s holiday festivities but ultimately turned outto be creating a surprising gift, was assigned to Media Arts Lab.

Among the first shootouts last summer, according to one creative close to thebusiness, was for the “Intention” film, which debuted at last year’s World WideDeveloper’s conference. TBWA/MAL’s work won, earning a lot of attention in thedesign and fanboy community for reclaiming Apple’s authoritative voice.

The addition of new agencies and the shootouts reflect what one person closeto the situation said was Mr. Schiller’s preference for having as many people work-ing on the business as possible.

According to one former TBWA/MAL creative, this is not the way the partner-ship used to work. “It was never at this level before,” the creative said. “It is onething to open up your account to a bunch of different agencies, but to build outyour own troops, give them the brief months in advance and then give it to theagency—it’s the most disrespectful thing.”

One insider said “jump balls” have always been part of Apple’s approach, butthe process has become more apparent over the past year or so because, moreoften than not, “the internal teams have won.”

“For whatever reason, MAL is seen as part of the old way of doing things,” said

CONTINUED FROM P. 14

‘MISUNDERSTOOD’Heartwarming holiday ad featuring a loner teen and a surprise ending was

conceived by TBWA/Media Arts Lab.

‘YOUR VERSE’Robin Williams’ voice-over serves as the backdrop to this emotional ad

for the iPad created in-house by Apple.

a creative who has worked on Apple marketing. “The people running MAL madesense with the way Steve Jobs liked to work. They had Wednesday reviews, they’dfly up to Apple and show work, and there was a process with Jobs. Now that he’snot there, they’re not innovating because they’re only doing what they know.”

Apple originally made its creative mark with longtime agency Chiat/Day, andlater, Media Arts Lab. Part of the TBWA agency network, the latter evolved fromof the longtime creative partnership established at Chiat between its founder, LeeClow, and Mr. Jobs, whose collaboration birthed iconic ads such as the “1984”Super Bowl spot and the 1997 “Think Different” campaign. TBWA/MAL kept upthe creative pace with more recent winners including the “Mac vs. PC”campaign.

FATE OF TBWA/MALExecs approached by Apple for internal jobs were told that TBWA/MAL would

continue to be part of the picture—but in what capacity remains unclear. Somesay it will need to fill the service-side duties Apple can’t handle internally. Otherspaint a bleaker picture of the shop’s future with Apple.

For now, however, it seems it will remain a creative player for Apple, but aspart of a growing, more competitive and more comprehensive marketing mix.

One person close to the matter said Apple’s in-house marketing leads have per-mission from Messrs. Cook and Schiller to scale its marketing and communica-tions resources to catch up to its business growth over the last few years. “The vol-ume of work exceeds the resource,” said the executive. Every Apple contractor,including TBWA/MAL, is “max busy.”

“They said they have so much going on from a marketing-communicationsstandpoint that MAL is part of their plan, but their expectations for marketing aremuch greater than what MAL is built to do,” said one top exec approached for apost. “They’re just expanding their practice. They were very honest that MAL waspart of the plan, they’re just not the only part of the plan.”

It’s hard to say whether the new approach has directly led to better product,but in the last few months, the marketer has clearly turned out better ads, workthat helps forgive the “Genius Bar Guy” faux pas.

Recent ads created by the internal agency include the 5C launch spot dubbed“Greetings.” It also handled last fall’s iPad air spot “Pencil,” as well as another thatfeatured a voice-over of Robin Williams from the movie “Dead Poets Society.”Meanwhile, outside of “Intention,” TBWA/MAL delivered the brand’s recentPixies-fueled ad “Powerful” and the charming holiday spot.

The broader creative picture shows that Apple is lining up as much talent—onall fronts—to inject innovation back into its game. Outside of marketing and com-munication, in October of last year, Apple generated buzz when to revitalize retailit hired Angela Ahrendts, the Burberry CEO known for bringing the once-stodgybrand into the modern age with groundbreaking digital initiatives. The recent $3 billion acquisition of Beats also brings music entrepreneurs Dr. Dre and JimmyIovine into the boardroom as senior advisers on content.

Big moves, all proving Apple’s determination to up its game. But reinventionwon’t be an easy process for the company or the agency that helped build it. To bor-row a phrase from Apple’s “Intention” film, “there are 1,000 nos for every yes.”

CONTRIBUTING: ALEXANDRA BRUELL AND SHAREEN PATHAK

APPLE MARKETING IS A WHOLE NEW GAME

20140609-NEWS--0014,0016-NAT-CCI-AA_-- 6/5/2014 9:44 PM Page 2