September 9, 2020 • 23 mins
This week on C-Inside: Holding Company Titans, we sit down with IPG Chairman and CEO Michael Roth. He fills us in on the holding company’s longstanding history of taking bold steps on diversity and inclusion efforts and his advice for making an impact that focuses on action over talk. Plus, we hear his prognosis for consolidation in the ad industry, why he’s betting on the company’s deal to acquire Acxiom as a major competitive advantage, and his take on the future of agencies in a post-COVID world.
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Episode Transcript
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Speaker 1 (00:00):
Good Company is a production of I Heart Radio. Our
people are clients, and society is looking to us to
not just talk a good game, but to actually do
something about it. Hi. I'm Michael Casson. Welcome to Good Company,
(00:21):
where I'll explore how marketing, media, entertainment, and tech are intersecting,
transforming our lives and the way we do business at
a breakneck speed. I'll be joined by some of the
greatest business minds and strongest leaders who will share how
they build companies from the ground up or transform them
from the inside out. My bed is you'll pick up
a lesson or two along the way. It's all good.
(00:44):
It's a great pleasure for me to welcome a good
friend and an industry icon to Good Company. Michael Raw. Michael, welcome,
and thank you for joining me today. It's good to
be here. Good to see if for our listeners pleasure.
Michael and I share something, which is we are both
tax lawyers, and we graduated from the same program at
(01:04):
New York University proudly and ended up somehow in this
crazy business. Yeah. Yeah, it's strange, strange events. You never know.
I didn't certainly when I was growing up. I didn't
visualize running a marketing communications company. You know, I always
wanted to be a tax lawyer. There you go, and
I always wanted to be a you know, a rock star.
(01:25):
I ended up as a tax player and then in
this crazy world. But Michael, it's been an interesting time,
and you know, I want to take a look back,
a look at the present, and maybe even a little
glimpse of what's around the corner. But you know, when
you came into this business, people raised their eyebrows and said,
you know, what the heck does a guy who was
running Mutual of New York know about the advertising business?
(01:46):
On fairness, you want on the board of into public before.
But you know you took to it like a fish
to water. Michael. You know it was a natural habitat
for you. Is something that you probably, as you said,
didn't anticipate. Yeah, you know what it's it's it's kind
of interesting when I when the board asked me, I said,
you know, I don't know other than being on the board,
I don't know any about the business. All I know
(02:06):
is I know how to run a business. UM YouTube
of New York ran into some problems and we were
successfully turning it around and ultimately demutualizing it and ultimately
selling the company. And uh, it's a people business and
you're dealing with clients, and so you know, it's just
a question of of a business model of the client first,
(02:29):
and how do you solve solving clients problems and how
do you have the best assets and people, uh to
do that. And I use structured to meet the needs
of the clients. So it really didn't matter whether it's
financial services or marketing and communications, it's that's the business.
Just to draw the comparison. That's how I looked at
it when I came into the business. Again, I didn't
(02:50):
have a background in the advertising media business per se,
but I looked at it because again I came into
the door of media, not the full purse. And I
looked at it and said, this is investment management. Client
giving your money to invest on their behalf, and they
want an r o I on that investment. They want
to return. Well, where it's an advisory model, and and
(03:11):
you know, the advisory model is what can you do
for me and how do you prove it. It's clear
that none of us are sitting here in the summer
of when we saw one another in January and Las
Vegas at Consumer Electronics Show. We would not have envisioned
we'd be sitting here five plus months into virtual quarantine
(03:33):
and and something that was beyond our wildest imagination, and
not on the positive side, but rather on the negative side.
And it's also been a year that has been fraught
with so many important messages and things that we as
an industry and just we as citizens need to reflect on.
But I do want to dive right into it. Recently,
(03:56):
you sent a very public and open letter to the
employees of Interpublic, but I think it was geared towards
your employees, but I think it was geared towards the
industry at large. It was an open letter, and you
referred to the moment in time that we're at as
a tipping point and an important tipping point where we
have a chance for meaningful change. Can we chat a
(04:19):
little bit about your view of where we are and
what you're doing personally and at IPG to affect the
change we need, and your advice for our industry. Well, look,
I mean when I came to the industry, and I
came from a financial service industry, and and what was
clear to me, you know, when I met with the
senior executives of IPG, not just as as I took
(04:42):
over to run the company, it was all white males
and and and what was clear to me is that
we're in a service business and the marketplace wasn't reflected
by all white males, right the women were doing the purchasing,
uh and and and Clearly, in order to think that
the right message out, we needed the right people. So
we embarked as a company to make diversity and inclusivity
(05:05):
part of the DNA of our company. And and so
right out of the outset, I made that a primary
objective to a point where we actually made objectives of
diversity and initially with women as part of the compensation
of our CEO. So we put in financial objectives that
(05:27):
they had to meet to get compensated as far as
their incentives to part of the exactly and and I
think we were the first company to do that. And
I wasn't bashful about it, and and I and a
lot of our people weren't happy with it. Whether they
call them quotas, whatever I just said. Look, in order
for us to compete, we need a diverse representation in thought, Okay,
(05:54):
and and so that's we were often running. And from
there we formed a diversity Council where where all of
our CEOs participated and and from there we we had
all sorts of inclusion awards that we went to UH
and and we we recognized that this was a core
part of our business and everyone embraced that and and uh,
(06:17):
you know, we even brought it up to the board
of directors. So fort of our board are women, and
so it's not just talking about it. We actually had
to bring it to life. And and it was it
was in those days, if you remember the early days
and can when we had the Women's Breakfast, were the
only holding company that had a breakfast that focused only
(06:39):
on creative women, and why aren't there more creative women
in the business? And it started out with fifty people
in the room and we ended up with hundreds of
people waiting online to get into our breakfast. So, you know,
we wanted to make sure that our company stood for
something that we wanted to have a company that people
wanted to work with and clients wanted to do business with,
(07:00):
and if it wasn't focused on inclusivity, then then that
wouldn't be the case. And then you fast forward. We
took the initiative from the Women's Initiatives to include uh,
people of color. I mean it took. It was a
couple of years, and I put a line on the
sand and said, okay, we've done a great job with women.
(07:20):
We have, you know, a fair amount of senior women
in the company. They're running agencies that have the important roles.
Now let's take a look at where we stand with
people of color. And it was embarrassing how poorly we
were doing there. So we we stepped up our game
with respect to diversity, and every one of our business reviews,
(07:41):
every agency goes through a diversity discussion on open positions,
career development, how many people of color, Asian, l l, G, B,
t Q, your, you name it. We we included inclusivity
to include everybody. Let me stop you there for a second,
because I hear you and I know that to be true.
(08:01):
But I also look at the grid and as you said,
there's not a lot of people of color in our industry,
full stop. If you don't open the aperture, you're never
going to solve this problem. It's impossible. The pool of
talent isn't there. If you restrict it. It's just not
there can't happen. So how do we do that? Well,
(08:21):
the way we do it is we expanded our recruiting efforts,
um and and and we we basically went to different schools.
You know, we go to Howard University and and and
we go to Buru College in New York. And we
have internships and and we encourage our people to to
participate in programs. I signed onto the Business Roundtable just
(08:46):
started a new initiative on actually hiring people who don't
have qualifications. Okay, and and and and um, it's it's
it's it's it's an amazing program that that we're embracing
as well. So what was clear and and you know,
if you look at since the George Floyd murder, if
(09:06):
you will, our people are clients and society is looking
to us to not just talk a good game, but
to actually do something about it. And and and so
what we have done and I sent out another one
of my notes. Look, I I as you know, I
believe that CEOs of big companies have a responsibility to
(09:28):
take positions. Okay, I did it on Charlottesville, I did
I did it on all of these and you know,
and and I actually had. I went to the board
and I said to them, I said, look, I hope
you don't mind, but this is important stuff. And the
board sat behind me. In terms of taking positions and
and since the jo George Floyd murder, we have been
(09:50):
very active in terms of holding various sessions and upping
our game in terms of recruiting of people of color
in particular, and engaging more importantly all of our employees
to understand the other side and educate. And we we
we had on Juneteenth we had an event, for example,
(10:13):
with Eddie Gloud Jr. From from Princeton. We had thousands
of people participating on this event talking about how how
do we how do we as a company change. So
we have these sessions with with allies we have we
have sessions who open mics, open town hall meetings with
senior management to talk about how are we going to
(10:33):
move this needle, what do we have to do to
make a difference, how do we bring it down to
the next level. We we we already held the c
yells accountable. How do we hold our managers accountable? How
do we hold our people accountable? And how do we
make sure that we have the pipeline of individuals that
are more representative of society. And and I can't tell
(10:54):
you the reaction I've gotten. I've gotten reaction from our
competitors who send me no saying out of you know, terrific.
I get notes from our clients, some of whom you know,
who send me notes saying, you know, it's about time
someone took a stand in this business for this. You know,
we participate, as you know, with UNI leader on the
stereotype and the United Nations program. So as a company,
(11:17):
we're not bashful about it. And and and everyone in
this company understands that we have to make a difference
and we're committed to do so. And and so we
improved our hiring process. We we we've we've gone deeper
in our hiring process. But we have to build this
around getting the right people for the future of this industry. Michael,
(11:40):
I want to go back to what I said at
the beginning of this segment. You've shown up. You just
don't talk about it, and do it. And I want
to applaud you, and I want to thank you because
you've you've truly been a leader in this industry full stop. Well,
thank you. Let's talk about the way we work. I
saw when you had your earnings announcement the a day
you talked about the office footprints around the world. What
(12:04):
what's your prognosis for how we're gonna work. Look, one
of the things about our company is transparency, and and
and when we were going through the earnings release and
and uh, the actions that we were taking. Once again,
we said, look, we're gonna put that out there. We're
gonna we're gonna basically tell it like it is, talking
about our our our earnings. And we took a very
hard look and what is our business gonna look like?
(12:27):
And you know, it's kind of easy. If someone came
up to me and said to me, in two days,
I want your entire company be to be working from home.
Can you do it? And and and the answer would
have been no, no way, no way. And and sure enough,
people working from home, you know, within a week. And frankly,
(12:48):
not only they're working from home, but they're doing it efficiently.
And and then meeting with clients and as you know,
we're pitching new business okay, and we're winning and we're
developing relationships. So we sit back and say, holy you know,
what does this mean so, so what it meant was
initially my gut reaction was because of the social distancing,
(13:11):
we're gonna need more space, not less space. Well, once
we understood that we don't need to have everybody in
the office at the same time or at all, then
we took a hard look at at at our space
and we in in. What we announced was we took
out five hundred thousand square feet um and frankly, we're
(13:32):
taking a very hard look at the question of how
do we operate in this new world. And what's clear
is that different Yeah, and the agencies are going to
be functioning differently. Now. Do I think we need agencies, Yes,
Do I think we need physical locations, yes, but that
they need to be used the same way as before. No.
(13:55):
And and so we're learning, and we're experimenting, we're doing surveys,
we're where we're experimenting. What we found was efficiently, people
get up at seven thirty in the morning, there's no commute,
They go to the computer. I'll tell you one of
the benefits of living in California, Michael, is the time
zones work to my advantage at the end of the day,
(14:15):
to my disadvantage at the beginning for sure. For sure,
I'm up early, but I'm done early on my day ends,
you know, a lot earlier than normal because it's not
that then at the end of the day, am I
going to have that drink meeting or that you know,
cocktail and then a dinner meeting or even a social
dinner where you know, all of our lives have changed
in that way. So I think you're right. The efficiency
(14:38):
I think has gone up geometrically. Yeah, it's actually to
a point where I actually had to tell our people
that make believe you're going to lunch otherwise they're they're
they're eating lunch in front of the computers. Okay, what
happens is people start getting you know, frustrated, and you
know it's not easy to do. So we have to
(14:58):
develop this balance getting back to work on a way
that works for everybody. Let me switch gears here in
the spirit of time. Our industries at a crossroads. Some
would say last year's news and noise was around more
in housing, and you know, now we've got the situation
where you know, there's a continued push for the threaded
(15:20):
D word disintermediation. We're seeing more and more of that
where where buyers and sellers are working directly. Number two,
just in general, at a difficult time like this, everybody
is going to be scrutinizing all expense and all you know,
remuneration for partners and colleagues. What do you think a
(15:42):
is the status of that in housing versus relying on
your agency still or is it a hybrid? Number one?
And number two, is this a time that people should
be looking at the possibilities of not only reduction of
you know, our consolidation of office space, but is there
a consolidation moment coming in the industy tree? Well, the
(16:05):
first one is, you know there is in housing. Clients
want to be efficient, but they need institutional knowledge, they
need data, they need analytics, they need and they as
you know, they need to understand what is the what
is the decision process? And how do you get high
value audiences? And and and that's you know, that's why
(16:27):
we bought Axiom. It's right, it's right up there, you know,
because what was clear to us is that the future
of this industry requires a much more granular look into
how do you how do we get high value audiences
and what products and services are relevant to those audiences,
and how do we do it without cookies? And how
(16:48):
do we do it without intermediaries? And and what value
propositions can we put on the table that we can
get paid for based on value? Okay, so we we
form knness. So we've had matter Kind and we have Axiom,
and we have the rest of the open architecture of
IPG all working together. And you've seen it h very
(17:10):
well and in a room where they're all working with
one focus and that is the client. And they're using
the data, they're using the analytics, they're using the high
value audiences. They're looking at how they optimize this spend
where the return on investment is. And we have all
of those assets coupled with the creative capability, the pr capability,
(17:32):
and eventually the experiential capability if we ever get back there,
all in one place, and and and so we have
structured our company to be in a position to respond
to all the issues that are happening to this industry
right now, including privacy and the changes on privacy. Axiom
is an expert of recognized expert on how to deal
(17:54):
with privacy. So so the the the Axiom transaction coupled
with the open architecture approach to business that we are in,
that we utilize I believe puts us in a competitive
advantage in the marketplace now. And it's showing. I mean
when that new business positive. We're leading the industry. I mean,
(18:18):
I I never thought I'd say I'm leading the industry
with a negative nine point nine percent organic growth, But frankly,
we are, and and and we're leading it by a lot. Okay,
so that's kind of scary, but but but it's true, real,
But really yeah, and and and um, you know, we've
been leading the industry now for five years actually, So
(18:40):
what I'm convinced of is we have the right assets,
we have the right people. We're working together on a
collaborative basis to optimize the the the data analytics, the
data capability of Axiom, coupled with the the technology of Kinesso,
and and and and Mada kind coming together, uh, and
(19:02):
and and and and really focusing on the needs of
the clients. Now. Are there too many of us in
the industry doing this chasing the same revenue? I I
said that from the day I joined this industry, I said,
we're all chasing the same revenue, all right, And and
and and you know, only the strong and shall survive,
all right, and and so yeah, do I think there
(19:24):
are possibilities for consolidation. Yes. Unfortunately, we had a hiccup
in our industry, as you know that that seriously raised
the question of whether these holding companies are capable of
doing transactions like that, um and so you know, everyone's
very nervous about it. But but I think in the end,
(19:47):
ultimately there are transactions out there that makes sense. So, Michael,
let me ask you, as a final question, what letter
of the alphabet are you putting on the recovery? Is
it a V? Is it a W? Go to logos?
Is it a swoop? What do you think at this Well,
I'll tell you what. I'll tell you how we're positioning IPG. Okay,
I viewed two thousand twenty as a year of positioning IPG.
(20:10):
For two thousand and twenty one, you know, we took
a restructuring charge of over a hundred million dollars. We
took unfortunately, we had to take some people out of
our workforce. We took the real estate hit. We're looking
at structural changes in our company. We're doing everything we
can because I remember, oh eight O nine and and
this is the same management team that got us through that,
(20:33):
and and and our mantra is position IPG for two
thousand and twenty one. And I can assure you that
for two thousand and twenty one, when that comes, and
if there's a recovery, which hopefully there will be, IPG
will be be positioned better than than many companies to
(20:55):
capitalize on that. So whether it happens in the first quarter,
the fourth quarter of two thousand twenty the first quarter
of two thousand twenty one, you know, I don't know
the answer to that, obviously, and and and I got
a little penalized because I didn't answer it on my
earnings call, um, But it's a how do I know
our approaches that for two thousand and twenty one, we
(21:16):
will be positioned from a cost structure, from a structural
point of view, both from a physical structure as well
as an agency structure organizationally, organizational we will be structured
to optimize the return of IPG in in a positive environment.
But again, I think you're doing what a responsible CEO
(21:37):
needs to do, which is position use this moment to
be positioned for what's coming. Do the best I can
to shore up the resources for now, but be prepared.
And we're finding that. We're finding that the it's kind
of the phenomena of purchase accounting, something you're very familiar with.
It's a purchase accounting moment across the industries that I've seen.
(22:00):
People are looking at the changes they need to make
and the things that are right to do. And since
nobody is giving guidance in a traditional way right now,
you kind of have a pass. I mean, everybody's kind
of how you got a pass for this year or
should and therefore do the make the moves now, And
that's what we're It's a smart and thoughtful way to
(22:20):
approach it. Michael, I want to thank you again for
being a great friend. I want to thank you for
being an industry leader. I want to thank you for,
as you we said earlier, not just talking about and
admiring the issues, but taking a leadership role. Michael Roth,
You're a mention, You're a good friend, and I'm proud
(22:41):
to call you as such. Thank you so much. Same here.
I appreciate it. I'm Michael Casson, thanks for listening to
Good Company. Good Company is a production of I Heart Radio,
a special thanks to Lena Peterson, chief Brand Officer and
Managing Director of medi Link, for her vision I'm Good Company,
and to Jen Seely, vice President Marketing Communications of media
Link for programming amazing talent and content. Good Company is
(23:04):
edited by Jessica Crimeschitch
Good Company is a production of I Heart Radio. Our
people are clients, and society is looking to us to
not just talk a good game, but to actually do
something about it. Hi. I'm Michael Casson. Welcome to Good Company,
(00:21):
where I'll explore how marketing, media, entertainment, and tech are intersecting,
transforming our lives and the way we do business at
a breakneck speed. I'll be joined by some of the
greatest business minds and strongest leaders who will share how
they build companies from the ground up or transform them
from the inside out. My bed is you'll pick up
a lesson or two along the way. It's all good.
(00:44):
It's a great pleasure for me to welcome a good
friend and an industry icon to Good Company. Michael Raw. Michael, welcome,
and thank you for joining me today. It's good to
be here. Good to see if for our listeners pleasure.
Michael and I share something, which is we are both
tax lawyers, and we graduated from the same program at
(01:04):
New York University proudly and ended up somehow in this
crazy business. Yeah. Yeah, it's strange, strange events. You never know.
I didn't certainly when I was growing up. I didn't
visualize running a marketing communications company. You know, I always
wanted to be a tax lawyer. There you go, and
I always wanted to be a you know, a rock star.
(01:25):
I ended up as a tax player and then in
this crazy world. But Michael, it's been an interesting time,
and you know, I want to take a look back,
a look at the present, and maybe even a little
glimpse of what's around the corner. But you know, when
you came into this business, people raised their eyebrows and said,
you know, what the heck does a guy who was
running Mutual of New York know about the advertising business?
(01:46):
On fairness, you want on the board of into public before.
But you know you took to it like a fish
to water. Michael. You know it was a natural habitat
for you. Is something that you probably, as you said,
didn't anticipate. Yeah, you know what it's it's it's kind
of interesting when I when the board asked me, I said,
you know, I don't know other than being on the board,
I don't know any about the business. All I know
(02:06):
is I know how to run a business. UM YouTube
of New York ran into some problems and we were
successfully turning it around and ultimately demutualizing it and ultimately
selling the company. And uh, it's a people business and
you're dealing with clients, and so you know, it's just
a question of of a business model of the client first,
(02:29):
and how do you solve solving clients problems and how
do you have the best assets and people, uh to
do that. And I use structured to meet the needs
of the clients. So it really didn't matter whether it's
financial services or marketing and communications, it's that's the business.
Just to draw the comparison. That's how I looked at
it when I came into the business. Again, I didn't
(02:50):
have a background in the advertising media business per se,
but I looked at it because again I came into
the door of media, not the full purse. And I
looked at it and said, this is investment management. Client
giving your money to invest on their behalf, and they
want an r o I on that investment. They want
to return. Well, where it's an advisory model, and and
(03:11):
you know, the advisory model is what can you do
for me and how do you prove it. It's clear
that none of us are sitting here in the summer
of when we saw one another in January and Las
Vegas at Consumer Electronics Show. We would not have envisioned
we'd be sitting here five plus months into virtual quarantine
(03:33):
and and something that was beyond our wildest imagination, and
not on the positive side, but rather on the negative side.
And it's also been a year that has been fraught
with so many important messages and things that we as
an industry and just we as citizens need to reflect on.
But I do want to dive right into it. Recently,
(03:56):
you sent a very public and open letter to the
employees of Interpublic, but I think it was geared towards
your employees, but I think it was geared towards the
industry at large. It was an open letter, and you
referred to the moment in time that we're at as
a tipping point and an important tipping point where we
have a chance for meaningful change. Can we chat a
(04:19):
little bit about your view of where we are and
what you're doing personally and at IPG to affect the
change we need, and your advice for our industry. Well, look,
I mean when I came to the industry, and I
came from a financial service industry, and and what was
clear to me, you know, when I met with the
senior executives of IPG, not just as as I took
(04:42):
over to run the company, it was all white males
and and and what was clear to me is that
we're in a service business and the marketplace wasn't reflected
by all white males, right the women were doing the purchasing,
uh and and and Clearly, in order to think that
the right message out, we needed the right people. So
we embarked as a company to make diversity and inclusivity
(05:05):
part of the DNA of our company. And and so
right out of the outset, I made that a primary
objective to a point where we actually made objectives of
diversity and initially with women as part of the compensation
of our CEO. So we put in financial objectives that
(05:27):
they had to meet to get compensated as far as
their incentives to part of the exactly and and I
think we were the first company to do that. And
I wasn't bashful about it, and and I and a
lot of our people weren't happy with it. Whether they
call them quotas, whatever I just said. Look, in order
for us to compete, we need a diverse representation in thought, Okay,
(05:54):
and and so that's we were often running. And from
there we formed a diversity Council where where all of
our CEOs participated and and from there we we had
all sorts of inclusion awards that we went to UH
and and we we recognized that this was a core
part of our business and everyone embraced that and and uh,
(06:17):
you know, we even brought it up to the board
of directors. So fort of our board are women, and
so it's not just talking about it. We actually had
to bring it to life. And and it was it
was in those days, if you remember the early days
and can when we had the Women's Breakfast, were the
only holding company that had a breakfast that focused only
(06:39):
on creative women, and why aren't there more creative women
in the business? And it started out with fifty people
in the room and we ended up with hundreds of
people waiting online to get into our breakfast. So, you know,
we wanted to make sure that our company stood for
something that we wanted to have a company that people
wanted to work with and clients wanted to do business with,
(07:00):
and if it wasn't focused on inclusivity, then then that
wouldn't be the case. And then you fast forward. We
took the initiative from the Women's Initiatives to include uh,
people of color. I mean it took. It was a
couple of years, and I put a line on the
sand and said, okay, we've done a great job with women.
(07:20):
We have, you know, a fair amount of senior women
in the company. They're running agencies that have the important roles.
Now let's take a look at where we stand with
people of color. And it was embarrassing how poorly we
were doing there. So we we stepped up our game
with respect to diversity, and every one of our business reviews,
(07:41):
every agency goes through a diversity discussion on open positions,
career development, how many people of color, Asian, l l, G, B,
t Q, your, you name it. We we included inclusivity
to include everybody. Let me stop you there for a second,
because I hear you and I know that to be true.
(08:01):
But I also look at the grid and as you said,
there's not a lot of people of color in our industry,
full stop. If you don't open the aperture, you're never
going to solve this problem. It's impossible. The pool of
talent isn't there. If you restrict it. It's just not
there can't happen. So how do we do that? Well,
(08:21):
the way we do it is we expanded our recruiting efforts,
um and and and we we basically went to different schools.
You know, we go to Howard University and and and
we go to Buru College in New York. And we
have internships and and we encourage our people to to
participate in programs. I signed onto the Business Roundtable just
(08:46):
started a new initiative on actually hiring people who don't
have qualifications. Okay, and and and and um, it's it's
it's it's it's an amazing program that that we're embracing
as well. So what was clear and and you know,
if you look at since the George Floyd murder, if
(09:06):
you will, our people are clients and society is looking
to us to not just talk a good game, but
to actually do something about it. And and and so
what we have done and I sent out another one
of my notes. Look, I I as you know, I
believe that CEOs of big companies have a responsibility to
(09:28):
take positions. Okay, I did it on Charlottesville, I did
I did it on all of these and you know,
and and I actually had. I went to the board
and I said to them, I said, look, I hope
you don't mind, but this is important stuff. And the
board sat behind me. In terms of taking positions and
and since the jo George Floyd murder, we have been
(09:50):
very active in terms of holding various sessions and upping
our game in terms of recruiting of people of color
in particular, and engaging more importantly all of our employees
to understand the other side and educate. And we we
we had on Juneteenth we had an event, for example,
(10:13):
with Eddie Gloud Jr. From from Princeton. We had thousands
of people participating on this event talking about how how
do we how do we as a company change. So
we have these sessions with with allies we have we
have sessions who open mics, open town hall meetings with
senior management to talk about how are we going to
(10:33):
move this needle, what do we have to do to
make a difference, how do we bring it down to
the next level. We we we already held the c
yells accountable. How do we hold our managers accountable? How
do we hold our people accountable? And how do we
make sure that we have the pipeline of individuals that
are more representative of society. And and I can't tell
(10:54):
you the reaction I've gotten. I've gotten reaction from our
competitors who send me no saying out of you know, terrific.
I get notes from our clients, some of whom you know,
who send me notes saying, you know, it's about time
someone took a stand in this business for this. You know,
we participate, as you know, with UNI leader on the
stereotype and the United Nations program. So as a company,
(11:17):
we're not bashful about it. And and and everyone in
this company understands that we have to make a difference
and we're committed to do so. And and so we
improved our hiring process. We we we've we've gone deeper
in our hiring process. But we have to build this
around getting the right people for the future of this industry. Michael,
(11:40):
I want to go back to what I said at
the beginning of this segment. You've shown up. You just
don't talk about it, and do it. And I want
to applaud you, and I want to thank you because
you've you've truly been a leader in this industry full stop. Well,
thank you. Let's talk about the way we work. I
saw when you had your earnings announcement the a day
you talked about the office footprints around the world. What
(12:04):
what's your prognosis for how we're gonna work. Look, one
of the things about our company is transparency, and and
and when we were going through the earnings release and
and uh, the actions that we were taking. Once again,
we said, look, we're gonna put that out there. We're
gonna we're gonna basically tell it like it is, talking
about our our our earnings. And we took a very
hard look and what is our business gonna look like?
(12:27):
And you know, it's kind of easy. If someone came
up to me and said to me, in two days,
I want your entire company be to be working from home.
Can you do it? And and and the answer would
have been no, no way, no way. And and sure enough,
people working from home, you know, within a week. And frankly,
(12:48):
not only they're working from home, but they're doing it efficiently.
And and then meeting with clients and as you know,
we're pitching new business okay, and we're winning and we're
developing relationships. So we sit back and say, holy you know,
what does this mean so, so what it meant was
initially my gut reaction was because of the social distancing,
(13:11):
we're gonna need more space, not less space. Well, once
we understood that we don't need to have everybody in
the office at the same time or at all, then
we took a hard look at at at our space
and we in in. What we announced was we took
out five hundred thousand square feet um and frankly, we're
(13:32):
taking a very hard look at the question of how
do we operate in this new world. And what's clear
is that different Yeah, and the agencies are going to
be functioning differently. Now. Do I think we need agencies, Yes,
Do I think we need physical locations, yes, but that
they need to be used the same way as before. No.
(13:55):
And and so we're learning, and we're experimenting, we're doing surveys,
we're where we're experimenting. What we found was efficiently, people
get up at seven thirty in the morning, there's no commute,
They go to the computer. I'll tell you one of
the benefits of living in California, Michael, is the time
zones work to my advantage at the end of the day,
(14:15):
to my disadvantage at the beginning for sure. For sure,
I'm up early, but I'm done early on my day ends,
you know, a lot earlier than normal because it's not
that then at the end of the day, am I
going to have that drink meeting or that you know,
cocktail and then a dinner meeting or even a social
dinner where you know, all of our lives have changed
in that way. So I think you're right. The efficiency
(14:38):
I think has gone up geometrically. Yeah, it's actually to
a point where I actually had to tell our people
that make believe you're going to lunch otherwise they're they're
they're eating lunch in front of the computers. Okay, what
happens is people start getting you know, frustrated, and you
know it's not easy to do. So we have to
(14:58):
develop this balance getting back to work on a way
that works for everybody. Let me switch gears here in
the spirit of time. Our industries at a crossroads. Some
would say last year's news and noise was around more
in housing, and you know, now we've got the situation
where you know, there's a continued push for the threaded
(15:20):
D word disintermediation. We're seeing more and more of that
where where buyers and sellers are working directly. Number two,
just in general, at a difficult time like this, everybody
is going to be scrutinizing all expense and all you know,
remuneration for partners and colleagues. What do you think a
(15:42):
is the status of that in housing versus relying on
your agency still or is it a hybrid? Number one?
And number two, is this a time that people should
be looking at the possibilities of not only reduction of
you know, our consolidation of office space, but is there
a consolidation moment coming in the industy tree? Well, the
(16:05):
first one is, you know there is in housing. Clients
want to be efficient, but they need institutional knowledge, they
need data, they need analytics, they need and they as
you know, they need to understand what is the what
is the decision process? And how do you get high
value audiences? And and and that's you know, that's why
(16:27):
we bought Axiom. It's right, it's right up there, you know,
because what was clear to us is that the future
of this industry requires a much more granular look into
how do you how do we get high value audiences
and what products and services are relevant to those audiences,
and how do we do it without cookies? And how
(16:48):
do we do it without intermediaries? And and what value
propositions can we put on the table that we can
get paid for based on value? Okay, so we we
form knness. So we've had matter Kind and we have Axiom,
and we have the rest of the open architecture of
IPG all working together. And you've seen it h very
(17:10):
well and in a room where they're all working with
one focus and that is the client. And they're using
the data, they're using the analytics, they're using the high
value audiences. They're looking at how they optimize this spend
where the return on investment is. And we have all
of those assets coupled with the creative capability, the pr capability,
(17:32):
and eventually the experiential capability if we ever get back there,
all in one place, and and and so we have
structured our company to be in a position to respond
to all the issues that are happening to this industry
right now, including privacy and the changes on privacy. Axiom
is an expert of recognized expert on how to deal
(17:54):
with privacy. So so the the the Axiom transaction coupled
with the open architecture approach to business that we are in,
that we utilize I believe puts us in a competitive
advantage in the marketplace now. And it's showing. I mean
when that new business positive. We're leading the industry. I mean,
(18:18):
I I never thought I'd say I'm leading the industry
with a negative nine point nine percent organic growth, But frankly,
we are, and and and we're leading it by a lot. Okay,
so that's kind of scary, but but but it's true, real,
But really yeah, and and and um, you know, we've
been leading the industry now for five years actually, So
(18:40):
what I'm convinced of is we have the right assets,
we have the right people. We're working together on a
collaborative basis to optimize the the the data analytics, the
data capability of Axiom, coupled with the the technology of Kinesso,
and and and and Mada kind coming together, uh, and
(19:02):
and and and and really focusing on the needs of
the clients. Now. Are there too many of us in
the industry doing this chasing the same revenue? I I
said that from the day I joined this industry, I said,
we're all chasing the same revenue, all right, And and
and and you know, only the strong and shall survive,
all right, and and so yeah, do I think there
(19:24):
are possibilities for consolidation. Yes. Unfortunately, we had a hiccup
in our industry, as you know that that seriously raised
the question of whether these holding companies are capable of
doing transactions like that, um and so you know, everyone's
very nervous about it. But but I think in the end,
(19:47):
ultimately there are transactions out there that makes sense. So, Michael,
let me ask you, as a final question, what letter
of the alphabet are you putting on the recovery? Is
it a V? Is it a W? Go to logos?
Is it a swoop? What do you think at this Well,
I'll tell you what. I'll tell you how we're positioning IPG. Okay,
I viewed two thousand twenty as a year of positioning IPG.
(20:10):
For two thousand and twenty one, you know, we took
a restructuring charge of over a hundred million dollars. We
took unfortunately, we had to take some people out of
our workforce. We took the real estate hit. We're looking
at structural changes in our company. We're doing everything we
can because I remember, oh eight O nine and and
this is the same management team that got us through that,
(20:33):
and and and our mantra is position IPG for two
thousand and twenty one. And I can assure you that
for two thousand and twenty one, when that comes, and
if there's a recovery, which hopefully there will be, IPG
will be be positioned better than than many companies to
(20:55):
capitalize on that. So whether it happens in the first quarter,
the fourth quarter of two thousand twenty the first quarter
of two thousand twenty one, you know, I don't know
the answer to that, obviously, and and and I got
a little penalized because I didn't answer it on my
earnings call, um, But it's a how do I know
our approaches that for two thousand and twenty one, we
(21:16):
will be positioned from a cost structure, from a structural
point of view, both from a physical structure as well
as an agency structure organizationally, organizational we will be structured
to optimize the return of IPG in in a positive environment.
But again, I think you're doing what a responsible CEO
(21:37):
needs to do, which is position use this moment to
be positioned for what's coming. Do the best I can
to shore up the resources for now, but be prepared.
And we're finding that. We're finding that the it's kind
of the phenomena of purchase accounting, something you're very familiar with.
It's a purchase accounting moment across the industries that I've seen.
(22:00):
People are looking at the changes they need to make
and the things that are right to do. And since
nobody is giving guidance in a traditional way right now,
you kind of have a pass. I mean, everybody's kind
of how you got a pass for this year or
should and therefore do the make the moves now, And
that's what we're It's a smart and thoughtful way to
(22:20):
approach it. Michael, I want to thank you again for
being a great friend. I want to thank you for
being an industry leader. I want to thank you for,
as you we said earlier, not just talking about and
admiring the issues, but taking a leadership role. Michael Roth,
You're a mention, You're a good friend, and I'm proud
(22:41):
to call you as such. Thank you so much. Same here.
I appreciate it. I'm Michael Casson, thanks for listening to
Good Company. Good Company is a production of I Heart Radio,
a special thanks to Lena Peterson, chief Brand Officer and
Managing Director of medi Link, for her vision I'm Good Company,
and to Jen Seely, vice President Marketing Communications of media
Link for programming amazing talent and content. Good Company is
(23:04):
edited by Jessica Crimeschitch
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