While holding companies have combined agency offerings in recent years, IPG’s Deutsch is going in the opposite direction, splitting its New York and Los Angeles offices into separate agencies.
“It intuitively felt like the next organic step for our respective agencies to take this path,” Val DiFebo, CEO of Deutsch New York, told Adweek.
The move officially makes a development that has already been implemented operationally. The foundation stone was laid when the CEO of Deutsch North America, Mike Sheldon, left at the end of 2019. DiFebo and Deutsch LA CEO Kim Getty ran their individual offices without broader oversight.
The official division into separate agencies allows each to independently track clients without having to worry about a conflict of interest while drawing on individual strengths and cultures.
In a statement, IPG COO Philippe Krakowsky, who will succeed Michael Roth as CEO in 2021, cited the “dynamic and independent leadership” of both offices.
“Kim has expanded Steelhead’s West Coast manufacturing capabilities and continued to focus the agency on entertainment, technology and culture. Val continues to leverage our data, media and technology assets to enhance their agency’s strategic offerings and creative business building work, ”he said.
“About a decade ago we made bets when the world was changing,” said Getty. Deutsch LA invested heavily in its digital capabilities and the Steelhead manufacturing facility that will house the agency’s operations when she returns from remote working.
Getty certified Diego de la Maza, evp and production manager, building the offering, including expanding it to off-schedule customer relationships. “We believe the production is creative. The closer we can bring all in the building to creation [process]the better. “
Deutsch Di York, according to DiFebo, has now earned a reputation for being shabby and gritty.
“This makes it possible to grab brands that are at turning points. We don’t hold back when we believe there are things to be said to bring a brand into an opportunity space or to reinvent itself, ”she said.
According to DiFebo, Deutsch New York has invested in building its data and technology services, including a recent focus on artificial intelligence as well as media skills, and has also focused on remote content production since the pandemic began.
Building a more inclusive culture
Both agencies claim to have made significant investments in diversity and inclusion.
In June, Deutsch fired Los Angeles CCO Brett Craig after an offensive email re-surfaced on Instagram about casting black talent.
“A really important job as a manager is to listen to the people in your agency. There was an enormous amount of advocacy for us [to prioritize DEI]”Said Getty.
German Los Angeles is 68.1% white according to the EEOC diversity data updated on its website in September. 5.7% of employees identify as Black or African American, including 2.5% of middle and 4.3% of senior executives.
Getty admitted that the agency has plenty of room for improvement, but says it is committed to change and has made significant strides this year. 48% of new hires were identified as black people, and a third of executives have been hiring black talent since June. The agency also pointed to measures including stepping up recruiting efforts at HBCUs, the first agency to partner with the Commercial Directors Diversity Program, and a commitment to increase black leadership to 13% by 2023.
Deutsch New York’s efforts include a scholarship to help black students get into advertising, including paid internships at the agency, education and training initiatives, and the introduction of a fairer hiring system that led to the hiring of EVP and HR manager Celeste Bell jar.
In June, 67% of German New York was white, 9.8% of employees identified as black or African American, including 3.9% of middle and 7.7% of senior executives. The agency plans to update its data by the end of 2020 and claims 60% of the new hires since June have been black women.
“We feel very urgent on this matter. One of the reasons we hired Karen Costello was her passion … putting DEI at the heart of the way we work, ”said Getty.
A return to the roots in a difficult year
When Karen Costello returned to Deutsch LA in August as CCO and filled the position vacated by Craig’s departure, it was also the agency’s 13th hiring to be promoted to the role of creative director.
“On her first day at the agency, Karen told the story of the beginning of Deutsch LA, of 13 people who sat in this tiny room. What really drove those 13 people was ambition, ”said Getty.
“Karen walking back in our doors and reminding us and driving us with that ambition is a really exciting thing for all of us,” she added. “It will go a long way in reconnecting with the entrepreneurship that has allowed us to achieve so much.”
Getty said the agency was recovering from setbacks that resulted in German LA laying off 10% of its workforce in April and growing year-over-year, largely thanks to a growing relationship with Walmart, including recent work on Walmart +.
The divided agencies now want to grow in different directions.
“As we all lean into our entrepreneurial spirit,” DiFebo said, “every agency will try to get ahead of clients’ needs before they need them.”
For every agency, this also means using the strengths and talent of their locations.
“We’re in the place where culture begins and we’re looking to leverage that for brands in really powerful ways,” said Getty, adding that Deutsch LA will continue to expand manufacturing capabilities while expanding its performance marketing practice.
German LA and German New York can now team up to work together for a client.
At the same time, no agency could rule out new deals against each other. “There are brands that Val and I both have ambitions and see each other as a good fit,” said Getty.
“It can happen,” added DiFebo.
Should it come to that, may the best German win.