September 2007 - The Dreamcatcher

Having scaled back his day-to-day responsibilities at his advertising agency, Donny Deutsch has taken on an even headier position as perhaps the nation’s most visible advocate for the American Dream.

By Tom Dellner - Photos by Roger Hagadone

Donny Deutsch is slowing down. Of course, by Deutsch standards, that means trading 16-hour workdays running one of the world’s leading advertising agencies for 10-hour workdays on the set of CNBC’s “The Big Idea with Donny Deutsch”-a job that Deutsch confesses is more physically taxing than he ever imagined.

Although Deutsch spends the lion’s share of his time as an indefatigable promoter of the American Dream on the hit show, he remains chairman of the agency that bears his name and stays intimately connected with the advertising world.

Electronic Retailer caught up with Deutsch to discuss the constantly shifting advertising and media landscapes and, of course, entrepreneurship and the steadfast pursuit of the American ideal.

Electronic Retailer: Compare Madison Avenue’s view of direct response advertising today versus 10 or 15 years ago. How has it changed, and why?

Donny Deutsch: If we look back 15 or 20 years ago, direct response was kind of the dirty stepchild of advertising. But now, the Internet is really the engine driving where all of advertising is going and when you think about it, the Internet is the ultimate direct response medium. So direct response has gone from stepchild to favorite child in this timeframe, and it’s simply because of the Internet.

ER: What is your opinion of DR as a branding channel, in addition to an acquisition channel? Is it possible to serve both masters?

Deutsch: I think we’re in a marketing world now where any medium that has the ability to show any kind of video or any kind of imagery or make any kind of meaningful emotional connection with a consumer can serve as a branding tool. The days where TV and magazines were the branding mediums and the Internet was the acquisition or direct response medium-that’s all changed. No matter what medium you use or whether you seek a direct response, as long as you can get the consumer to feel something, you can brand, because that’s what branding is all about.

ER: Can you provide an example of a campaign that was successful on both fronts?

Deutsch: A perfect example from about a year ago was Burger King’s “Subservient Chicken” campaign. Obviously, they were selling a chicken product, a sandwich, but yet they created a brilliant, wonderfully interactive, entertaining medium with a chicken character driving millions of people to the site.

So clearly you can do both, and I think all advertising in the future needs to.

Donny Deutsch has built his own advertising agency empire. However, with a hit show on CNBC, this advertising guru is pursuing bigger ideas.

ER: Are large, traditional agencies facing increased pressure from clients to account for performance?

Deutsch: Absolutely. That’s the price of entry now. That’s the challenge. Everyone’s looking for a performance matrix. Of course, not everything is measurable.

I recently spoke at a marketing conference put on by the National Basketball Association and that was one of the main issues that arose again and again: if you’re a sponsor of the NBA or any sport or promotional event, how do you measure results? It’s difficult, and yet clients, even in something that’s a softer, traditionally non-measurable purchase like the sponsorship of a NASCAR team, they’re looking for real ROI matrixes, and that’s not going to change.

ER: What do you think is the reason for this increased pressure?

Deutsch: We’re living in an increasingly high pressured, quarter-to-quarter world. And now bigger pieces of the pie are going to non-traditional DR/online advertising. So say you have a $100 million budget and $30 million is devoted to DR/online advertising, which is more easily measured. Clearly, we have clients who see these measures, these results, and demand accountability across all mediums, thinking, “Hey, you’ve measured some of it, I want to measure all of it!”

ER: How do you see the advertising landscape shifting as a result of increased media fragmentation?

Deutsch: To use a cliché, the more things change, the more they stay the same. Every time we see a media sea change-for instance, the first time television really came on-the advertising industry screams, “Oh my god, this is going to change the world!” And, yes, the distribution changes. But the general rules hold true. A great idea is a great idea, and that isn’t going to change. It’s just a more fragmented media world and the architecture of that great idea is going to have to apply to this fragmentation. Making human connections with people is not going to change. You have to have a great brand platform, where you really connect with people based on fundamental human truths. This foundation is always going to be there. Once you have it, it’s just a matter of slicing and dicing it differently.

ER: Through acquisition and partnership, Google is rapidly developing a presence in TV, radio and print, in addition to the Internet. What are your thoughts regarding Google’s impact on the advertising industry?

Deutsch: I think it’s really a fait accompli. They started out in the plumbing end of the business, if you will, and now are rapidly moving into all aspects of the advertising side. They’re an 800-pound gorilla. Their resources are unlimited. Interestingly, my ad agency happens to share a New York office with them and they are hiring creative talent left and right. It only remains to be seen how successful they are.

ER: Much is made of the growing prevalence of DVRs and ad-skipping. How significant has the impact been on television advertising’s effectiveness and how will advertisers respond?

Deutsch: Let’s break it down to the fundamentals. Here’s the reality: There’s kind of an unwritten troika contract between those who sell beer, people who buy beer and the media that delivers the message. That can’t go away. Somehow, this consortium, this troika, is going to figure out how to keep things going because, frankly, our model doesn’t work any other way.

ER: Why don’t more Fortune 500 companies utilize direct response?

Deutsch: Well, if you equate direct response with the Internet-as I do-more and more are. It depends on the business model, of course, but I think now you’re going to see more and more of what we used to call direct response advertising getting a larger and larger piece of the pie, and I think it’s going to be devoted primarily to the Internet.

ER: Tell us about the development of your television show, “The Big Idea with Donny Deutsch.”

Deutsch: When I was running the agency, I tended to be the guy the media would call for ad quotes, so I was interviewed quite a bit and always loved it, and found that I was good at it. I eventually talked CNBC into doing a pilot, which turned into a weekly show, which turned into a nightly show. The show seems to have found its voice about six months to a year ago-it’s inspirational, people discovering new ideas; it’s almost an ode to the American Dream.

ER: Each episode, you introduce your viewers to innovative products and business plans. Can you identify two or three that you were especially impressed with?

Deutsch: I don’t know if I can identify two or three. I would answer it this way. What continually blows me away is the consistency of the way businesses get started. It all starts with a moment of inspiration, an idea. You make a product. If it’s a beer, you then sell a beer to a bar. It it’s clothing, you sell one item of clothing to one store and that’s the way it starts. It is amazing how many of these billion-dollar businesses start out of a garage. And it’s no different than Microsoft or most any Fortune 500 business. What’s fascinating is that today, in our digital world that turns on a dime, the foundation, the true American Dream of somebody with a vision, just going for it and breaking the rules-this hasn’t changed. The map is still the same as it was for Andrew Carnegie or Henry Ford. It’s someone with a big idea who takes the ball and then it’s just one foot in front of the next. It’s the stunning commonality of it all that I find amazing.

ER: For all of those “Big Ideas” that come your way, you must be approached with some off-the-wall stuff, as well-some very Small Ideas, as it were.

Deutsch: Yeah, there are a lot of whacked-out ideas that come to us, but we’re pretty good about weeding those out. Luckily, the producers are adept at sifting those out before they get to me.

ER: Your role is to educate and inspire your audience and guests. Have there been instances on the show where the tables have been turned and it’s been you who has been educated or inspired?

Deutsch: I recently had a woman on whose great grandmother was a slave. She made a fantastic maple syrup. After she was emancipated, the recipe was passed down through the generations. And, here is her great granddaughter on my show, and we’re talking about how she’s taken this recipe and made a $50 million business out of it. In business, at least, it doesn’t get any more inspirational than that.

ER: As you transitioned into television work, did you encounter any surprises or unforeseen challenges?

Deutsch: The biggest surprise was how physically tiring it is. When I was running my agency, I was working 16-hour days. With TV, I am working significantly fewer hours, but it’s far more physically draining, with all the adrenaline that you put out there when doing a show.

ER: What’s on the horizon for you? Do you have any future projects you can share with us?

Deutsch: Basically, I’m looking to build the show into a business. We occupy a unique space; we’re kind of the Tony Robbins of the business world, if you will. I think there’s a billion-dollar business in that in terms of other shows, syndication, books and other things. I’m just focused on building this brand out-the show really seems to have struck a nerve.

We would appreciate your feedback. To submit comments, please e-mail the magazine at [email protected].


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