From anguish to reinvigoration

By IRENE CHAPPLE

Ross Goldsack laughs a lot, swivels his chair to sit on it backwards, and seems like a happy man.

Which is somewhat surprising, considering recent circumstances. He wasn't very happy a few months ago, but there has been plenty of change for the Auckland-based managing director of Young & Rubicam.

Indeed, a few months back Goldsack was living in Wellington and wanting out: of advertising, of Young & Rubicam, even of New Zealand.

Goldsack watched as account after account fled the agency in which he holds a 20 per cent shareholding.

Some were through no fault of the agency, others were. Wherever the blame lay, the bad luck seemed to continue, and last year Young & Rubicam lost about a third of its billings income of just under $70 million.

Goldsack, recovering from a long illness and the collapse of his 24-year marriage, was ready to quit.

Midway through last year, he told major shareholder Young & Rubicam Australia that he was selling up.

"I would have left, probably gone to Europe and treated it as a journey on my own," says Goldsack of his original plans. "I wouldn't have been too fussed about leaving."

So what went wrong at Young & Rubicam?

Many believe the spiral began with the loss of the National Bank, a cornerstone account for the agency.

It had been on the books for 10 years and was originally held by Goldsack Harris, which partnered with Young & Rubicam in 1999.

In 2001 it went to Clemenger BBDO and half the 30 Wellington staff were made redundant.

Goldsack says the National Bank was responsible for "90 per cent of my grey hair" - and that was before the agency lost it.

The advertising industry is high-risk. Jobs are almost inevitably lost when a client walks, and often their reasons for doing so are obscure.

Repitching for a business that is threatening to walk is time consuming, expensive and can be, in the words of Young & Rubicam creative director Chrissie Lahood, "utterly soul destroying".

The National Bank account "used to gnaw at me day and night", says Goldsack. "I used to worry about it constantly, having this huge account that was, in a nutshell, half the [Wellington] agency."

But it fled, despite a repitch that Goldsack says was, in hindsight, the worst thing the agency could have done.

Although the National Bank loss is old news, it is repeatedly mentioned when present and past employees muse on what has gone wrong over the past few months.

Last year, Young & Rubicam lost the Tower, Tui and Mitsubishi accounts, along with a major chunk of Woolworths.

After the losses, 15 Auckland staff left through redundancies or resignations.

Fifty remain in Auckland and between 13 and 15 in Wellington.

The losses were of senior figures, including chief executive Peter Scutts, Auckland creative director Gordon Clarke and The Media Edge's Dale Spencer.

Four staff from the 15-strong Auckland creative team were made redundant.

The departures have saved Young & Rubicam $2 million in wages and associated staff expenses.

The psychological blow of losing the National Bank is seen by some as an early problem, as is the "perception is reality" maxim that holds so true in the advertising industry.

Perhaps DB Breweries marketing manager Mark Jenner explains it best.

He called the unexpected pitch on Young and Rubicam's million-dollar Tui account.

It was an award-winning and successful account, and Lahood is still flabbergasted.

Says Jenner: "If clients are leaving you have got to ask why they are doing it. You have got to ask are they holding onto the good people ... you have got to listen to the signals. Our confidence [in Young & Rubicam] was a little shaken, and it is a confidence game."

Despite that, Jenner says he had enough faith in Young & Rubicam to invite it to pitch against the brewer's other agency, M&C Saatchi.

"There had been a lot of change in the agency. The people had changed, it was smaller, and we said 'let's make sure these guys have still got it'."

Young & Rubicam pushed his hand, says Jenner, by pulling out of the pitch and forcing him to either call it off or appoint M&C Saatchi, which he did.

According to Lahood, the only possible explanation for the pitch was that DB Breweries simply didn't want to work with Young & Rubicam any more - so they decided not to waste time and money on a pitch.

The loss was an emotional blow for the agency that built up the 'Yeah Right' campaign into a national saying.

But it was the Tower loss, compounded by the Mitsubishi loss, that ultimately led to the collapse of Auckland's creative team.

Mitsubishi marketing manager Ross Cameron says he had been unhappy with the creative product produced by Young & Rubicam's Auckland team for some time.

Mitsubishi required a team experienced in a strong automotive brand, says Cameron, and such needs were not being met.

"Essentially we don't think we were listened to properly. We gave them every opportunity to lift their creative game, but it just didn't happen."

Cameron says even a creative experienced in such brands and employed on a short-term contract could have helped.

"We were given the right answers, but nothing happened."

Mitsubishi is now working out its termination clause with Young & Rubicam.

In March it will move its $6 million to $7 million account to newly appointed agency Clemenger BBDO.

Goldsack has his own reasons for the Auckland office's problems, but they too revolve around the creative team.

He believes the pitches the office was involved in - about six last year, none won - were a waste of time. Pitches can cost up to $75,000 and are, more often than not, simply expensive "ambulance chasing".

Goldsack says the office was also focused on winning creative awards at the expense of all else.

Free or cheap work was done for clients whose campaigns would be more likely to win awards, says Goldsack, and major paying clients suffered.

"Creativity should be a focus [in an agency]," says Goldsack, "except it should come from clients that you are working with - that is what keeps you in business. Awards should be a byproduct of great thinking and communication and results."

Goldsack's allegations are rejected by former senior director Ian McDougall, made redundant just before Christmas.

He sees it more as a case-by-case issue, and says some of it was plain bad luck. And, he says, "sometimes you get mystified by the decisions of [clients]."

McDougall is hugely supportive of Lahood's appointment as New Zealand creative director (she was formerly the Wellington creative boss), calling her "unequivocally fantastic".

The sentiments are repeated by many, with support also voiced for Goldsack.

The two are close and, along with Wellington boss Dennis Carroll, were going to walk together. When Goldsack reneged, so did Carroll and Lahood.

"Ross has a really good approach," says Lahood. "He has been known to say in Monday morning meetings 'I don't want anyone to work too hard because life's too important ... please go home at a reasonable time'."

Lahood has two children and she says such an attitude had made it easier to cope with being a mother and a professional.

She has been with Young & Rubicam for three years, and says Goldsack has changed dramatically over that time.

"When I arrived Ross was totally overworked, he wouldn't be sleeping, he used to come in at 6am, he was unapproachable and didn't seem very happy."

Ross agrees, and says his past two years of "what the Irish would call 'my troubles"' have forced him to assess his life.

Part of that was feeling reinvigorated about advertising, moving to Auckland and "feeling like I could make a difference".

Now, says Lahood, "[Goldsack] is wandering around always wanting to talk ... making a nuisance of himself."

Goldsack's decision to revoke his resignation was welcomed by Hamish McLennan, chief executive of the Australian and New Zealand offices of Young & Rubicam since August.

"I have great faith in Ross' ability as a professional and we have high hopes for him," says McLennan. The Australian shareholder now holds 65 per cent of the New Zealand operation, up from 45 per cent due to share buy-backs from staff such as Scutts and Clarke.

McLennan says the Young & Rubicam brand will stay, as will the two offices.

It will not, he says, sell out to STW Communications, as rumoured.

However, both Young & Rubicam and STW are ultimately controlled by global media giant the WPP Group, and McLennan says they may share resources.

"We're investors in this brand and the business. We wouldn't take up this shareholding if we didn't have confidence in the business ... there is no intention [to sell] - it's a matter of plotting our own destiny."

The irony of the disastrous past few months, say McLennan, is that financial results are likely to be the best for three years.

Goldsack too, is feeling confident and has told Australia he wants to increase his shareholding. That, however, is unlikely to happen this year, as the New Zealand operation is changing from a partnership structure into a limited liability company.

Goldsack is already making changes in Auckland.

All staff will move to the one floor in Young & Rubicam's Parnell office, although media arm The Media Edge and direct marketing arm Wunderman will keep their names for branding purposes.

Already this year, Young & Rubicam has won the Caltex account, which Goldsack says he will directly control.

Pitches, however, aren't priority. "Our focus now is the business that we have, to realise opportunities that exist in those current clients."