08
Apr 14

Apple’s little advertising crisis

Phil – and his email – get their day in court

Corporate legal dramas often serve as a reminder to one of the new cardinal rules of business:

Watch what you say in email.

I suspect there are a few people at Apple and its ad agency TBWA\Chiat\Day who wish they could take their messages back, now that Samsung’s lawyers have introduced them as evidence.

One email from Phil Schiller to Tim Cook says that Apple “may need to start a search for a new agency … we are not getting what we need from [Chiat] and haven’t been for a while.”

Tim’s reply: “If we need to do this, we should get going.”

Yikes.

This all happened in 2013, so who knows if it’s blown over by now. But given Steve Jobs’ long-running relationship with Chiat, this potentially represents a huge break from the past.

A little perspective is in order.

A brief history

Steve started working with Chiat way back in the days of Apple’s first computer hit, the Apple II. Along with Chiat came the agency’s chief creative, Lee Clow — one of the most acclaimed creative directors in advertising history.

The relationship between Steve and Lee would become historic.

To launch Macintosh, Lee and his team created the legendary 1984 Super Bowl commercial. They also established the tone of voice that guides Apple to this day.

Chiat’s Macintosh work probably changed advertising as much as Macintosh changed computers. The 1984 spot alone is considered by many to be the best ad of all time. Directed by Ridley Scott, it was the first truly cinematic commercial, forever changing the nature of Super Bowl advertising.

But then bad things happened. When John Sculley pushed Steve out of Apple, he also gave Chiat its walking papers. He replaced Chiat with BBDO, which was Sculley’s ad agency back in his Pepsi days.

The advertising community was outraged. As common as it is for agencies to get canned, this firing seemed so unfair after all the fantastic work Chiat had done.

It took a while, but 12 years and two CEOs later, Steve Jobs was running Apple again. And advertising justice would finally be served.

The revenge of Chiat

Within weeks, BBDO was out and Chiat was back in. Steve faced a mammoth task restoring Apple to greatness, and he wanted a creative agency that shared his passion. He certainly didn’t want Sculley’s leftovers.

Suddenly Lee Clow was once again doing the job he loved most: working with Steve and Apple.

The rest, as they say, is history — for both Apple and Chiat. A series of Chiat campaigns played a huge role in the resurgence of the nearly bankrupt Apple. First came the Think different campaign, then a run of new product launches that helped turn Apple into the most valuable company on earth. That included iMac, MacBook Air, iPod/iTunes, iPhone and iPad.

Chiat authored the Mac vs. PC campaign that many (including me) consider to be the best advertising Apple has ever run. With 66 commercials running over four years, this campaign caused endless buzz and helped boost Mac’s market share dramatically.

It’s a rare agency that contributes so much to a company’s growth over such a period of time.

Steve Jobs, master marketer

Most CEOs keep marketing at arm’s length.

Steve was not only involved in marketing — he loved it. And, as should be obvious to all, his skills in this area weren’t too shabby.

He presided over the regular marketing meetings with the agency, conducted major project briefings himself, and was present at every advertising checkpoint from start to finish. No matter how busy he was, he made himself available to discuss advertising any time of day or night.

Steve was not a dictator when it came to marketing. He wanted to hear others’ opinions, but he would often challenge and debate.

All of us in the room — including Phil Schiller — knew what it was like to be vetoed by Steve when our arguments failed to convince.

Part of the family

With marketing so close to his heart, Steve treated Chiat like a partner, not a vendor.

In fact, he treated Chiat as if it were an extension of Apple, to the point where he would even invite key agency people to Apple’s secret “Top 100” meetings.

There was a ton of mutual respect in this relationship. Which is why, in marketing’s world of fleeting relationships, Chiat has remained Apple’s agency for 17 years.

Does that mean Steve never got frustrated with the agency’s performance? Of course not. There were plenty of blow-ups along the way, because that was Steve’s nature. He was passionate about getting every detail right, and sometimes his passion boiled over.

But Steve was also realistic. He knew that talented people who really “got” Apple were hard to come by, and that starting over with a new agency would be a huge undertaking with unpredictable results. No doubt he also appreciated the many times Chiat had delivered extraordinary work.

So, for Steve, the nuclear option was what nuclear options tend to be: 99% unthinkable.

The questions begin

Since Steve passed away, Apple critics have had a field day pointing to the signs that Apple is doomed — even if the facts don’t quite support their conclusions.

Being largely subjective, advertising is a particularly easy target.

Whether or not Apple’s advertising has suffered without Steve, one can’t deny that “things have changed.”

Steve is gone. Phil now leads the advertising effort. And Lee Clow has removed himself from the day-to-day business of the Apple account.

So, in a business where relationships are everything, the relationships between Apple and Chiat are not at all what they used to be.

Advertising after Steve

Has the nature of Apple advertising changed since Steve passed away? See above note about advertising being subjective.

In my opinion, the answer is yes. In general, Apple ads now feel “softer.”

Compare the philosophical Designed in California and What’s Your Verse? ads to the wildly entertaining Mac vs. PC ads. The newer approach has resonated with Apple customers, but they aren’t disruptive like ads that came before. They don’t generate the same level of awareness.

We’ve also seen one bona fide disaster after Steve’s time, with the Genius campaign that aired during the 2012 Olympics. This effort was wrong in so many ways, it made people wonder “How did this even happen?”

Did the agency push for this work despite Apple’s reluctance? Or vice versa? Or did Apple and Chiat march hand-in-hand over that particular cliff?

Remember, it takes two to tango.

About that “coolness” gap

According to the newly-revealed emails, Phil Schiller was unhappy about Samsung’s surge and felt that “things had to be turned around.”

The idea that people would see Samsung as cooler than Apple was unthinkable just a couple of years ago. Now the WSJ was writing that the tide is changing.

For the sake of argument, let’s assume it’s true. Would that be Chiat’s fault?

Only to a degree. I can buy the idea that if the ads were edgier, Apple might not have seemed quite as listless while Samsung was issuing a stream of new products.

But Apple doesn’t get off the hook so easy. What makes Apple truly cool is its product portfolio. The products are what capture imagination and cause the buzz. When Apple releases a bigger-screen iPhone and an iWatch later this year, will anyone be talking about a coolness gap?

And then there’s the little matter of budget. Samsung is spending 3x-4x what Apple spends for advertising, appearing on broadcasts such as the Super Bowl and Oscars while Apple sits by. It blankets cities and transportation hubs around the world with advertising, while Apple remains quiet.

So is Chiat really falling down on the job? Or do they make a convenient scapegoat?

Who’s the culprit?

When Phil would offer an opinion about advertising to Steve, Steve responded as the chief marketer.

When Phil offered his opinion to Tim about changing ad agencies, Tim responded as an operations guy.

With his “If we need to do this, we should get going” reply, he wasn’t exactly pressing for a lot of detail.

The fact is, if there really are irreconcilable differences in the relationship now, the real problem could be on either the Chiat or Apple side.

It could well be that Phil is most effective in the marketing role he served with Steve, where his job was to advise — but his marketing instinct and creative taste were not the deciding factors.

How Apple works with its agency is a matter of extreme importance. Tim Cook should be looking at all the facts and making the decision himself.

The bottom line

Sorry, I need to revise something I said earlier.

Steve Jobs did treat Chiat as a partner. However, he was the senior partner.

Not to depress anyone thinking of a career in advertising, but that’s the way it is in agency-client relationships. The client pays the bills, so the client gets to decide.

It’s the client who can keep rejecting work or asking for revisions until they see something they like. It’s the client who accepts or rejects the final versions of the ads. It’s the client who chooses what agency to work with.

Which explains this old saying in the ad biz: “Clients get the advertising they deserve.”

We don’t know what’s going on right now in the Apple-Chiat relationship. We can’t predict what kind of ads Apple will run in the future, or what agency will be creating them.

There’s only one thing we do know: Apple will get the advertising it deserves.

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28 comments

  1. Great article. I always appreciate your keen insight.

  2. The email exchange between Schiller and Chiat’s James Vincent was very telling, and it’s hard to see how that was on Apple. Vincent completely misread the situation, and that disconnect alone could have put the account in review. Maybe the only reason it didn’t was because it cleared the air and they got beyond it – or because Apple decided it didn’t need the turmoil of a review in 2013.

    Your larger point is well taken: is the client giving crisp direction to the agency. Schiller’s email response to Vincent indicates he understands the situation very well, but maybe it doesn’t translate as clearly to Chiat.

    Also – advertising for Apple may not be as easy as it was in the Mac vs. PC days; it always more fun to be edgy or disruptive when you’re the challenger. However, Chiat now has the chance to be the senior partner, and greatness is demanded.

  3. That’s the thing that Steve brought to Apple that I don’t believe has or can be fully replaced – a top-to-bottom eye for taste, detail and decisiveness. Apple under Steve was in the business of making one customer happy – him. Phil was in the same business, so when he got full responsibility for marketing after Steve’s passing, it likely and understandably prompted a period of real uncertainty for both him and the agency. Thankfully they seem to have turned it around and found a common ground they’re all happy with for now, albeit as you said, a ‘softer’ ground. That may simply reflect where they are in terms of iterative products rather than launching anything really ‘new’ though – the launch campaign for their next truly new product will be the one to watch (pun intended!)

    As to the email exchange between Phil and the Agency – however unloved they were feeling at the time, it was a very poorly considered email to Phil, and he was quite justified in his subsequently blunt response back. I’m not surprised he floated the idea of replacing them to Tim based on that email, but thank goodness they got the message and were able to come back with some of the great ads run since. Perhaps the exchange was just the shake they needed to refocus their efforts.

    It would be too much to go in to the ‘edgyness’ of Samsung vs Apple advertising here as well – I think we’ve touched on it before anyway – but in many ways Samsung has it easier than Apple as the underdog. It’s a lot tougher to be the leader and maintain that level of coolness versus a challenger brand, though Samsung’s inability to maintain a consistent theme or execution continues to help!

  4. That’s the thing that Steve brought to Apple that I don’t believe has or can be fully replaced – a top-to-bottom eye for taste, detail and decisiveness. Apple under Steve was in the business of making one customer happy – him. Phil was in the same business, so when he got full responsibility for marketing after Steve’s passing, it likely and understandably prompted a period of real uncertainty for both him and the agency. Thankfully they seem to have turned it around and found a common ground they’re all happy with for now, albeit as you said, a ‘softer’ ground. That may simply reflect where they are in terms of iterative products rather than launching anything really ‘new’ though – the launch campaign for their next truly new product will be the one to watch (pun intended!)

    As to the email exchange between Phil and the Agency – however unloved they were feeling at the time, it was a very poorly considered email to Phil, and he was quite justified in his subsequently blunt response back. I’m not surprised he floated the idea of replacing them to Tim based on that email, but thank goodness they got the message and were able to come back with some of the great ads run since. Perhaps the exchange was just the shake they needed to refocus their efforts.

    It would be too much to go in to the ‘edgyness’ of Samsung vs Apple advertising here as well – I think we’ve touched on it before anyway – but in many ways Samsung has it easier than Apple as the underdog. It’s a lot tougher to be the leader and maintain that level of coolness versus a challenger brand, though Samsung’s inability to maintain a consistent theme or execution continues to help!

  5. There were lots of jobs that Steve did that are
    now no one at Apple seems to be doing.
    Tim cook would have to hire more people to do them but
    he seems to not about to understand that.
    Samsung hired lot of people to attack Apple, simply having
    new advertisement won’t do because Apple can’t mention
    them or attack them. So what exactly Schiller is asking
    for is also suspect. Apple only has advertisement
    to introduce new product or feature and some holiday theme ones.

    Apple also got free advertisement when stock was high flying
    once the growth slow down a lot of veteran employees started retiring.
    Firing of Scott Forestall was also watershed.
    So we have brand new people.. and Apple is actively abandoning
    their core fans by their moves that is why people are not upgrading
    to newer machines and OS. Even ipad growth has gone to low numbers.
    Not to mention that economic down shift will permeate even Apple.

  6. You make great points as always, Ken. Also, I agree with your earlier assessment of Phil Schiller. He may in fact be a great product guy, but not sure if he’s got the taste and instincts for leading a marketing team. The jury is still out, I suppose.

    It should be pointed out that Apple’s ads haven’t exactly lit the world on fire ever since the first iPhone launch. It’s not like this has simply been a post-Steve phenomena. The iPhone introduction campaign was great, but nothing since Mac vs PC and the Silhouette campaign has really captured the zeitgeist in any big way. I suppose Steve Jobs would never have approved the Genius campaign, but it’s not like he never approved an ad that was equally as dreadful (you’ve mentioned the horrid iPod Dancing Man ad in the past).

    Personally, I really like the Verse campaign. I don’t mind the grand artiness of it, I think it’s beautifully executed, though I really hate the iPad Air branding. Should just say iPad. Silly sales-first mindset crept in.

    I do seem to recall you going googly eyed for that Pencil ad, Ken. I loved it too. Ditto the Misunderstood spot. Apple/Chiat has seemed to regroup following some ugly missteps. Let’s not be too harsh towards Apple here.

  7. This thing is so overblown. It’s no different as a coach telling his team that they need to start tackling better or step your game up. (yes I did the sports analogy like a “shooter in a grove feeling it”)

  8. The ‘Every Day’ ads were fantastic.
    Who is responsible for those, Ken? Whoever it is, certainly stepped up to the plate. Are those ads a result of both teams being pushed? If so, job well done.

  9. Reading the full thread all I will say is that Chiat is no longer the agency it once was. Here is the full email thread. It is pathetic! If I was Phil, I would sack them at the “please accept my apologies” reply. What a twat!

    http://www.businessinsider.com/phil-schiller-emails-2014-4

  10. I do agree that that Apple ads after the iPhone launch fell into a “formula.” Hand holding iPhone, lots of apps demonstrated, end of spot. Even the brand-new, revolutionary iPad followed the same format.

    You’re right, Steve Jobs was fine with all of that. Though his image is otherwise, Steve definitely had a “pragmatic” side. With sales through the roof, he saw good reason to keep doing what he were doing. Personally, I wish Steve he have been more adventurous as iPhone matured.

    One difference between now and then, though, was that Steve and the agency were in sync. Things get hairy when there is all this external pressure, the agency thinks it has a great solution and Apple doesn’t agree (or vice versa). It takes talent and judgment to envision how a campaign will look when finished, and individuals see things differently. Without a Steve to push things through, it can descend into my-opinion-vs.-yours kind of debates — the success of which depends on chemistry and mutual respect.

    And yes, I did love the Pencil and Misunderstood ads. Very well done. But creating a one-off ad is a lot easier than creating a campaign that builds equity over time — like Mac vs. PC did. That campaign was unusual in Apple history, as it was a classic, long running “campaign,” and not just a momentary message. It’s super challenging to create such a thing, but I do find myself wishing Apple had such a weapon in its battle against Samsung.

  11. I’m not so sure Chiat “got the message,” as you say. Phil’s comment that that Apple wasn’t “getting what we need from Chiat and haven’t been for some time” sounds like a client frustrated with the larger relationship, including advertising.

    I agree that there is a difference in what you can do being the leader vs. being the underdog, but … Samsung can’t really be considered an underdog anymore, and they still seem to be doing more attention-getting advertising.

    Apple has a terrific brand personality — intelligent, witty and edgy — and there’s no reason that can’t be applied to ads coming from the leader.

  12. Totally agree, no reason for Apple to go soft just because it’s big. Seems like the point-of-attack for such a campaign is largely already built in too: everybody in tech wants what Apple has. They copy/emulate/rip-off etc… I’m sure this angle has occurred to Chiat and Apple but it’s hard to convey something like that without coming off as an insecure sore winner.

    Gosh, Apple was great at tweaking their opponents, not only with Mac vs PC, but also the great Switchers campaign as well as their cute campaign again Intel’s burning hot Pentiums. I think the time is ripe for just such a campaign.

    Question though (I suppose this obviously depends on the content of the ad): but do you think if Apple were to do such a campaign, should it specifically go after Samsung by name or have it be blatantly aimed at them?

    Seems like the reportedly larger screened iPhone 6 also has that angle already built in — the large-screened phone you always *really* wanted.

  13. BTW, when did it became OK to use in lowercase only on an email to one of the largest clients on the planet?

  14. Edgy ads are what I want.

  15. Edgy ads are what I want.

  16. I think Apple needs to get a little more “edgy” with the ads and get on the offense, but I really think it’s difficult with the position Apple is in right now (most successful company on Earth). I’m sure the ad geniuses at Apple/Chiat could do it, but would it come off right? Apple truly intended the designed by apple in California as to be a new campaign, as Tim Cook said when they debuted it. But it seemed to make people feel Apple was preachy or pretentious. I think the message could have worked, just the writing and execution needed improvement.

    I’ve had an idea about an attack ad ever since the Galaxy S5 was announced. I’m no expert and maybe it’s an awful idea, but maybe you could give me your critique Ken lol. Show an ad with the GS5 and iPhone next to each other with some Elvis music playing in the background, and compare both phones fingerprint scanning. Show the iPhone unlock immediately and seamlessly by just touching the home button, and unlock to a video of Elvis performing. The GS5 user will be stumbling with the fingerprint scanner through the majority of the ad, trying to swipe the button at the perfect speed/angle. Then towards the end of the ad the GS5 finally unlocks, and unlocks to a video of an awful Elvis impersonator performing and stumbling around. Then end the ad with “there’s nothing quite like the original.”

    Something like that. Lol, maybe it’s an awful idea. Idk, I just thought it would be a good idea to showcase how superior Touch ID and the 5s are to anything else on the market trying to imitate it.

  17. “The idea that people would see Samsung as cooler than Apple was unthinkable just a couple of years ago. ”

    Not quite, it’s easy to be cool as the challenger brand, the company that’s for those that think think different, but it’s not so easy when you’re the leader. When Mac stores are full of old people, how can early adopters and hipsters be happy, how can you think different by being the same, Apple’s marketing is merely a victim of it’s own success.

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