K eeping up with the accelerating change in media is a challenge for both agencies and clients. Peter Schweitzer, the newly named CEO of J. Walter Thompson, has been chief caretaker of the agency's biggest client, Ford Motor Co. since 1986, overseeing both Ford national and dealer advertising accounts. Schweitzer says the growth of nontraditonal media is putting unprecedented pressures on agencies - and causing some automakers to fire agencies. Automotive Marketer Contributing Editor Laura Clark Geist caught up with Schewitzer last month at the National Automobile Dealers Association convention in Las Vegas.
Why do you think so many carmakers have severed their relationships with their agencies in recent months?
I think everyone is under more pressure today. Agencies have to become better business partners with their clients.
In the old days, (clients) wanted you to do ads and get them in on time and on budget and have effective advertising. (The agency's) role has expanded, and the requirements have expanded far beyond that today. (Clients) are really looking for solutions and ideas to solve business problems, not just advertising problems.
One of the struggles that we're going through as an industry is expanding our offering to move from traditional advertising (radio, TV, print) to this whole new thing called the Internet, which leads to this whole new thing called digital offerings, whether it's DVD, Interactive television, TIVO. It's a lot more complicated than the old media.
It's putting pressure on us to develop a whole new skill set, finding people with different kinds of disciplines. The net of all of this: Clients are looking for business solutions. And, of course, there has been and will always be pressure on costs, whether it's within the agency or within a manufacturer. All of our clients are being pressured on their own cost side.
How has the new compensation structure affected this?
The good news is that it takes the pressure off a particular revenue stream and allows us to be able to recommend a much broader array of business solutions. So I think what the new compensation structure has done for us is to help us focus on what we're trying to accomplish.
Ford has been very good about being fair. We're all honest with each other and have been for a long, long time. So when we do things and come up with ideas, we are properly compensated. That side of the business is not an issue. But the pressure to perform in all new areas is constant.
What about Ford Motor Media, do you see any changes?
We're looking at how we can upgrade it and absorb some of these new media. I think we've got to get some more expertise in the new media (Internet, interactive entertainment and events). We've been working with a lot of outside expertise in those areas, but it would be good to have those built in-house.
What are some of your chal-lenges as CEO?
We, as a company, have made seven or eight major purchases in the United States last year, and they've been centered around digital type companies, a couple of public relations companies and a couple of techno-ad agencies primarily on the West Coast. As a company, we're trying to build up that expertise. Our job is to integrate that with something like a Ford Motor Media.
Are you moving to New York?
No, I've had a second office in New York for about four years that will be a little more active. I travel about 40 percent of my time now, mostly on behalf of Ford. With the new job, I'll travel about 50 percent on behalf of Ford and other clients. For example, I'll be traveling to the Australian Grand Prix, which is the first Formula One race, in March. I'll be going on behalf of Ford and Jaguar.
It sounds like you're going to continue your present role with the Ford account.
J. Walter Thompson has had the Ford account since 1943 in Detroit. And every chief executive since then has been pretty intimately involved in the Ford business with the exception of Chris Jones, who didn't get that involved because of my role to do all of Ford.
Are you looking for someone to replace you?
Yes, we're looking for somebody to take over the domestic side of the business. I was originally asked to do the CEO job in 1994, but at the time, because of family and professional circumstances, I didn't feel it was the right time. I'm looking for someone to take over the day-to-day duties on Ford.
One of the reasons I'm able to take the CEO job this time is that we have a better team, a more complete team. They are doing very well vis-a-vis the client. We have expanded international. We picked up (Ford) Brazil last year. We have some pretty good young people. We've staffed up our Ford Division team.
What are some of the responsi-bilities of the Detroit office head in terms of Ford?
The bulk of the revenues and the bulk of the work is done with Ford Division, but we have a relationship with Ford Motor Co.'s Trustmark Group, Ford Motor Media, Ford dealers, international, Mazda in Europe and Jaguar in Europe. So it's more than just Ford Division. We have a relationship with market research and Ford Motor Credit. It goes on and on.
Will you be looking for someone with Ford experience, or auto experience in general?
With all the agencies losing car accounts, have you had people knocking on your door?
The amazing thing is when I got this new title, I got a bunch of congratulatory notes - half of which had resumes attached to them. Some of them were for themselves, others indicated 'My son needs this.'