Young & Rubicam

Y&R CIO John Gerzema talks shop for The Economist Marketing Forum. We found his remarks on the cultural loss of trust particularly interesting. Go to 12:56 for that section.

More: "Q & A With John Gerzema, Chief Insights Officer Young & Rubicam"

In a memo sent out to staff today, Y&R New York administrators informed employees that there is a confirmed case of H1N1, or swine flu, in the agency.

"We have a Y&R NY employee with a confirmed case of novel H1N1 flu (swine flu)." the memo states. "As a precaution please monitor for symptoms and check with your health care provider about any special care you might need."

Anyone with concerns about H1N1, click here to find out what the CDC has to say. We hope this person is OK.

More: "Who's Laughing About Swine Flu?"

In passing, we mentioned that Miller has shaken up its roster. Here are the details: Bartle Bogle Hegarty, Young & Rubicam and Upshot have all lost their seat at the Miller table.

- Miller Lite is now at Interpublic's DraftFCB Chicago. They lost Killian's Red to Jacobson Rost and Keystone, too.
- Miller Genuine Draft, Keystone and MG64 are now with the New York office of Saatchi & Saatchi, which also holds Miller High Life and Miller Chill.
- Upshot's, a retail agency, has seen their account distributed across Omincom including The Integer, Digitas in Chicago and Arc in Chicago.

Got it?

More: Publicis Gives Shares To Its Employees

Our Google alert has alerted us to the news that WPP's Enfatico will be merged with Y&R. From the WSJ, who broke the story:

"The move is a retreat from one of the most ambitious projects on Madison Avenue - an effort to eliminate turf wars by housing many different marketing disciplines within a single firm. The structure was one of WPP's key selling points when it landed Dell's advertising and marketing business in December 2007."

A statement from the agency read that this was "a strategic decision" and that "Enfatico remains a standalone brand alongside Y&R's other companies including Y&R Advertising, Wunderman, Burson-Marsteller, Landor and others."

You knew this was coming. From the beginning, Enfatico was the subject of the ad industry's jeers. One client. Too many bodies. A huge lease on a downtown building. Mediocre creative, high level staff changes on the client side and everyone has heard the rumors that Dell is shopping around. A bold idea has gone bad. CEO Sir Martin Sorrell was going to have to do something with the increasingly heavy weight of Enfatico. WPP isn't healthy enough (and really who is?) to redistribute the shop's employees, which number around 800 people worldwide. Where are they going to go? As Sorrell recently wrote in The Financial Times: "Some have said that, intellectually, recessions are exciting or fun. That is callous nonsense. Telling someone who has lost their job or business that their troubles are merely part of a cycle will provide little comfort." Oh how true. Maybe Marty-Mar should write everyone at Enfatico a little note, hmmm?

Meanwhile, WPP as a whole is struggling. JWT recently closed its Chicago shop. In the UK, Publicis beat out a team from WPP for Visa's 2012 Olympic business. Y&R Chicago just lost the Miller Genuine Draft account to the New York office of Publicis Groupe's Saatchi & Saatchi. And WPP's Mindshare is defending the $250M Wrigley account any day now.

Tough times for WPP. Still, the company is pushing deeper into the Pakistani market. Does Sorrell have President Asif Ali Zardari in his pocket? Zardari is known as "Mr. 10% Percent" considering his alleged skill in the fields of bribery and money laundering. WPP isn't alone though. Plenty of death star agencies are hoping that growing businesses in "developing countries" will defray some of the shock and awe happening in the US, as well as Europe. In WPP's case, the balance sheet is a little shaky. Sure, WPP posted $13.6 billion in revenue for 2008, but that includes two months of revenue from TNS and it's against a whole lot of debt.

In early March, the Sorrell told investors that: "I'd just like to say in the 25, 30 years that I've been in the business, I have never seen anything quite like this." His long list of worries is surely growing and growing and growing.

More: Enfatico Fails On The Adamo Campaign

Remember that whole Young & Rubicam SF portfolio review that we spoke about last week? Who knew there was an associated YouTube channel? Not us and apparently, nobody else either. With every video clocking under 40 views after two weeks, perhaps their marketing plan for this open call needs a tweak or two?

This is where you just want Y&R to go ahead with the open call, but use YouTube as a head hunting device. Rather than wait for kids to come to you, why not go to the kids? And when I say kids, I mean 18, 20, 30 year olds who didn't take the advertising path because they were worried about their soul, but churning out some great content and rip-off spots. As everyone in this business says, the best talent is right under your nose. Bring 'em into the fold, yo.

More: John Gerzema, Chief Insights Officer of Y&R Talks About The Brand Bubble

Two things:

1. We're looking for someone to write a state of the state piece for San Francisco, Los Angeles and Seattle. Um Wexley? We're looking at you on that last one. Have you go the right stuff? Email us at agencyspy at mediabistro dot com with why you are qualified to do the lay of the land. Yes, you can be anonymous.

2. I just spent way too long playing with Y&R San Francisco's version of an old school Arcade game, Galaga. The game is in support of an hope house for creatives the agency is hosting on January 28th, 2009. Copywriters? Creatives? Get portfolio together, yeah?

More: Have You Seen The Axe? Hang Out With Erik Proulx

John Gerzema is the Chief Insights Officer for Young & Rubicam and he is also the co-author of top selling business book, The Brand Bubble. He was kind enough to explain his theory behind the misevaluation of brands, why McDonald's makes a good study and why agencies need to get in on the game.

1. In your book, you assert that despite rising valuations, that WSJ has overvalued brands. How can those playing the stock market determine who is actually worth their stock price? Is there an at home way to sort out the bloated brands from the properly evaluated?

"The brand bubble represents the growing disparity in the value that business and consumers apportion to brands. We found the multiples that markets place on brand valuations overstate actual consumer sentiment. In essence, Wall Street thinks brands are worth more than the consumers who buy them.

We reached this conclusion through extensive analysis, but in our book we detail an easy method that anyone can use to assess their brand's value. First we want to understand if the brand has what we call energized differentiation - the consumer perception of motion, difference and direction. We measure this through BrandAsset Valuator, which strongly correlates to a brand's pricing power, loyalty and contribution to financial return (e.g. The brand value is delivering, if not exceeding its expectations set by market valuations). To get people started, we've opened up our database for free on our website, thebrandbubble.com."

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John Gerzema, Chief Insights Officer, and Ed Lebar, economic consultant, at Young & Rubicam want you to know that consumers have been "falling out of love" with brands. Really? Do you really need anymore bad news on this Monday morning? Apparently, you do. Their new book, "Brand Bubble: The Looming Crisis In Brand Value And How To Avoid It" is a study in consumer perception and valuation of brands.

"While Wall Street has been bidding brand values ever higher, consumer perceptions toward brands are substantially eroding... Financial markets think brands are worth more than the consumers who buy them," the authors said in the LA Times.

Gerzema and Lebar have coined a new term called the "brand bubble," which they say is bursting as we speak. It's apparently a $4 trillion bubble, too. As the financial markets have been driven into the ground, so goes brands. The thesis is that there are only a handful of great brands left, which people trust and respect and love. The rest of the brands? They're fucked.

"These stellar brands are becoming fewer in number... We found an increasingly smaller number of brands accounting for a disproportionate share of the [stock market] value being created."

Oh! And there's another new term - "brand energy" - which makes it debut in the their book. They claim to have discovered a new "creative life force." Uh-hunh. What "brand energy" really means is the principle that brands need to continuously innovate and focus on forging a good rep with consumers.

Whew. Okay. That's all shit you knew just packaged under the auspice of fear. Okay. Okay. The world is still turning.

More: Advertising Terrorism: Honda Has Got To Love It

Creative duties on Outback Steakhouse are in play. According to Adweek, the five agencies attempting to rustle it up are McKinney in Durham, Chicago's Ogilvy & Mather, Young & Rubicam, Lowe New York and the incumbent, The Kaplan Thaler Group. Carat holds media duties.

We all know that Kaplan ain't gonna take this home. Bets anyone?
My money is on McKinney.

I wonder who is responsible for Outback's recent integrated media buy on The Office? An episode's last line, as the whole staff gobbles some Outback Steakhouse: "Keep those ribs coming!" Very smooth. Yeah.

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We received the release you'll see below this morning, after posting a rumor we'd heard last night. We can't confirm the origin of the release, so take it as speculative for now.

Y&R announced today that John Berg is joining the agency as President and CEO of Y&R San Francisco. He succeeds Penny Baldwin. Berg joins the agency from TAXI New York, where as its President for the past two years, he broadened their offering, drove innovation, attracted new business and tripled their revenue.

"John is a brilliant addition to our North America
management team," said Tom Sebok, President and CEO of Y&R North America. "He knows how to drive growth, knows how to develop and deliver great work, and understands the impact that building the right agency culture has on both. John Berg always touches the heart of his clients and his employees, and that translates to great results," he stated.

Read the rest of the release, after the jump.

More: "Y&R Does Diversity"

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