Austin’s Local Paper says GSD&M is in trouble
When the local paper starts discussing your downfall, it’s worth more than some trade magazine… the local reporters live, shop and send their kids to the same schools the agency employees send their kids to.
In short it hits really close to home.
But in the past several years, the nationally recognized, high-flying, politically connected agency has suffered a series of setbacks, causing many observers to wonder: Can GSD&M turn itself around?
GSD&M leaders, who rarely publicly acknowledge the company’s troubles, say they’re trying to boost their client base as well as bring new blood to their creative efforts.
Long boom, hard fall
GSD&M was on a hot streak in the late 1990s, when it was winning about two-thirds of its pitches for new business.
From 1982 to 2001, GSD&M was picked by AdWeek as its “Agency of the Year” for the Southwest eight times.
But in 2006, GSD&M started to lose such cherished clients as Wal-Mart.
To cut costs, GSD&M curtailed parties, bonuses and raises.
“People were unhappy, not necessarily because of compensation alone,” said one former GSD&M worker who left the agency in 2007. “People just started losing morale.”
The article continues to move on from there, basically stating that GSD&M has much work to do in order to turn around…
The article pokes fun at the name change from GSD&M to GSD&M Idea City… and the more serious issues such as stunning account losses of recent…
What makes it so interesting is the fact that their local paper is writing the article… not some far flung Ad Agency Magazine or Blog…
We are in a recession, so of course Advertising is one of the first things to go, generally speaking.. So a turn around in a shrinking market is a difficult task for any agency, much more for one that has been trending downwards for a few years (as the article has pointed out).
We wish GSD&M the best…. but with what appears to be little investment with online efforts such as SEO, Social Media and other growing aspects… they will be stuck fighting with everyone else for the shrinking dollar base allocated to Traditional advertising…. the type that will continue to decline during the recession… and without many of the tools that would be needed for growth… such as higher growth online marketing other than just Adwords spends it will continue to be a problem.
As we noted, we wish them the best… but from where we are sitting it will be challenging for them.
The article fails to mention the most serious issue facing the agency - talent drain. They recently lost the account director on their marquee account, BMW and another of their VP/account directors is leaving this week. Their interactive creative department - the key to the future, many would say — is all gone, having left for DaVinci, Schematic and others over the last few months. Same with Interactive media. And the Creative Dept. has more books out than the public library.
Some of the lost positions are being replaced, but while people are leaving to go to good big agencies, the replacements are coming from straight out of school, or from small local agencies.