THE DAILY Goes One-on-One With GSD&M Co-Founder Roy Spence

Upon his graduation from the Univ. of Texas in ‘71, ROY SPENCE and five friends and UT classmates founded advertising agency GSD&M in a one-room office in Austin. Lacking clients as well as experience in advertising and marketing, Spence turned his naiveté about the business into a strength behind what he labeled “purpose-based branding” and “dynamic collaboration.” Thirty-six years later, the agency, relocated to a $19M HQs in Austin, with offices in Dallas and Chicago, had built a client roster of such respected brands as Southwest Airlines, Wal-Mart, AT&T, BMW, Frito-Lay and the U.S. Air Force. Spence spoke recently with SportsBusiness Journal New York bureau chief Jerry Kavanagh.

Date and Place of Birth: 10/10/48 in Brownwood, Texas.

Education: B.A., Government, University of Texas ’71.

Favorite piece of music: “Already Gone,” by the Eagles. It says the key in your life is right there in front of you. I’m a huge fan of any kind of song that gets you to think about something you hadn’t thought before.

Favorite Vacation spot: I have a little place in Colorado on the Roaring Fork River.

Favorite Book: “Good to Great,” by JIM COLLINS. It talks about how you can take a good company and become a great company. But it’s really about how can you try to become a great person. The “Good to Great” philosophy says three things:

1. What are you passionate about?

2. What can you be the best in the world at?

3. How do you make money on it?

Add those three things together and you can be a good-to-great person or organization. I love that book. Good-to-great principles are what I love.

Favorite Quote: T.S. ELIOT said that man shall never cease to explore but that when he’s done, he’ll go back to where he started and know it again for the first time.

Favorite Movie: “Being There.”

Last books read: “How She Does It,” by MARGARET HEFFERNAN, and “The Fourth Turning,” by WILLIAM STRAUSS and NEIL HOWE.

Athlete you most enjoy watching: VINCE YOUNG.

Basic management philosophy: Marry the doers and the dreamers and get the in-betweeners out of the way. The dreamers can see the mountaintop but they don’t know how to get up it. And the doers will climb all the wrong mountains perfectly.

Best professional advice you received: Take the competition seriously but not yourself. That’s from HERB KELLEHER at Southwest Airlines.

Best decision: Be a better “us.” We all have envy. GORE VIDAL used to say, “Every time I read something that somebody wrote that’s better than I wrote, a little piece of me dies.”

Biggest challenge: Stay curious and make sure that we’re in the next business, not yesterday’s business.

Regrets: Nope. The only time I think you’re disappointed is when you’re disappointed in yourself. The other disappointments are just this thing called life. I don’t have any regrets.

Fantasy job: I don’t think you ever get burned out doing what you love. My mom used to say, “Why do you want to spend your life being average at what you’re bad at?” So, I think as long as the fantasy job is to try to be great at what you’re good at, any job is a fantasy job.

GSD&M Co-Founder Roy Spence

Q: Why do you do what you do?

Spence: You know, I love creating things that weren’t there before. That’s the truth. It’s the thrill of life. I got three great kids; they weren’t there before. When you start a business, it wasn’t there before. When we do advertising and marketing and planning and new ideas, [we] go find those things that haven’t been done before.

Q: You use humor in your ads. You find that’s the way to get people’s attention?

Spence: We think advertising is an uninvited guest because people don’t wake up and say, “I’d like a cup of coffee and a Ty-D-Bol commercial.” Except for the Super Bowl, you don’t wake up and say, “I’d like an ad in my life.” In fact, you try to do everything to avoid it.

Q: Do you have your own advertising rules?

Spence: Our three principles within all of our advertising are, first of all, we’ve got to captivate or grab you. Second, we’ve got to entertain or reward you: make you laugh or think or cry or whatever for the time you spend with us. And then we’ve got to persuade you that what we have to offer is of value. So while we use humor a lot, we really like to use humanity, in the broadest sense.

Q: In that case, does your advertising appeal more to emotions than to intelligence?

Spence: It’s a great question. We try to get people at that gut-level relevancy. And I think it’s the combination of the art and the science. We try to get people to connect with us emotionally, but we don’t believe that, long-term, if you just connect emotionally and don’t have some smartness in your ads -- we want our advertising to be smart -- then it’s all sugar and no oatmeal. It will make you laugh, but you’ll forget the brand name or whatever. So we try to have the combination of emotional and intellectual, but we lead by trying to connect with the gut.

Q: You opened a meeting with Wal-Mart by showing a clip from “Dumb and Dumber.”

Spence: I did. You know the reason for that is, when they put the account in review, only 10% of the time when a client goes in to review does the agency keep the business. I know the difference between gambling and risk-taking, but I thought, what the hell, we’ll have fun with this one.

Q: Your agency, GSD&M, was started in ‘71 by six people with no experience in advertising. You said, “Naiveté was our biggest strength.” How so?

Spence: There are people within our industry -- in every industry -- who are looked at as the bad boys. They’re the people who break the rules. They know ‘em and they break ‘em. We were never that. We just didn’t know what the rules were, so we made ‘em up. We were naive. There weren’t any advertising agencies in town hardly, and we were blessed to study under SAM WALTON and Herb Kelleher and NORM BRINKER, who started Chili’s restaurants. So we hung out with dreamers and entrepreneurs, not ad people. We were naive about what the rules were, so we made them up according to what was the best thing for the customer.

Q: Your office in Austin, Texas, is a long way from Madison Avenue. And philosophically there is some distance between what you do and what Madison Avenue does, is there not?

Spence: I would say so. And it’s not which one is better. It’s just we’ve been closer to the street. We’re closer to, you know, the idea that we’re not caught up in layers and titles and bureaucracies and all that. We’re caught up in creating things that weren’t there before to build a business. I think the culture in our company is the big difference. We like people who like us. We treat people like we want to be treated. It’s not perfect, but most of our people want to get up and come to work because they love where they work and who they work with. And that’s the big difference. A lot of people hate what they do. We don’t. We love what we do.

Q: Purpose-based branding: What does that mean?

Spence: Purpose trumps everything. And our definition of purpose is, "What difference are you trying to make?" When Southwest Airlines started that business, Herb Kelleher wanted to let more people fly. We looked at it and said, “Well, the purpose of that airline is to democratize the skies.” So, we’re not in the airline business; we’re in the freedom business. When you have a competent company that has a deep abiding purpose, and if you buy into the purpose, I think you’ll love what you. So, we try to brand on purpose.

Q: But isn’t every business brand purpose-based?

Spence: You know, I think all of the businesses that end up being around for a long time had a purpose. A lot of times, they lose it. I don’t know what happened to Enron. But normally when companies lose their purpose, it’s because the leaders become corrupt. They forget the purpose of the organization. They forget the fact that you’re trying to build a company that means something. I think all companies start off with some kind of purpose, and then they either lose it, change it or corrupt it. Or they embrace it. And the ones who embrace it are the ones that are built to last.

Q: You also talk about “dynamic collaboration.” Define that.

Spence: So many people in this industry think they know it all, and we don’t know anything. We’re scared all the time, and we’re humble all the time. We wake up wanting to know more. We don’t have the corner on the smarts, so we simply believe that dynamic collaboration makes us all smarter and better.

Q: You have said, “Don’t believe anyone in marketing who claims to be an expert because this is uncharted water for everyone.” How do you navigate in uncharted water?

Spence: Stay close to the consumers. Sam Walton said that whenever you get confused, go to the store. The customer has all the answers. I don’t know if you’ve read about it, but I’m going to walk across America, starting September 30. I’m going to reconnect and re-understand. I think that the people who buy the products are the smartest people, not the people who manufacture them. You don’t have to do a lot of focus groups. You just need to go out there and talk with people, and that’s what I’m going to do.

Q: ART GARFUNKEL at one time started to walk across America.

Spence: He did. I saw his route. Has he completed it yet? He was just starting off and went. I’m going to do 25 days a year, for five or six years, because I’ve got a business to run. But also I’m going to see America at its best. For example, I’m starting in New England in the fall, which will be great. And then as I go to the Midwest, maybe the springtime is better. I’m going to go from Maine all the way to Washington. It’s going to be awesome. I can hardly wait! I have lots of people who want to walk with me (laughing).

Q: In an interview in ‘04, you said, “If we knew then what we know today, we wouldn’t have gotten into this business.” What do you know now that would have pointed you in another direction?

Spence: I think that what I meant to say was that you can over-know in the marketing business, and then you start trying to manage your way through marketing and advertising instead of leading your way. If I had known then what I know today, I don’t know if our company would have been as sensitive and vulnerable. I mean that in a good way. We’re open to new ideas and new ways of thinking and being close to the customer. So I would say that that statement was about, “Let’s keep ourselves close to the consumers and let’s not let all those other technical things really get in too much of the way.”

Spence Feels Advertising Has Had An Overall Favorable Impact On Sports

Q: Where would sports be without advertising?

Spence: Never in my life have I thought about that question. But I would say that sports would always be sports. You’re going to have people competing against each other, whether it’s here or around the world, at any level at any time, whether it’s marbles or hopscotch. Advertising has made sports a lifestyle. It’s allowed sports to reach the masses, for good or bad. In the end, I think advertising is a good thing for sports.

Q: Ad Age called you an “innovator.” Who and where are the innovators in sports business today?

Spence: I think a lot of the innovators are in the coaching circles. I speak to the Texas [football] team with [coach] MACK BROWN and I’m just struck by how these coaches are preserving the values of the sport but open to new ways and new attitudes. With the caliber of players and the equipment and the training ... people don’t realize that these men and women are athletic machines and they are all capable of doing anything extraordinary. It’s the coaching and the training and the teaching that puts winners on top.

Q: Is there an advertising challenge, in any area (sports, business, politics, entertainment), that you would be eager to take on?

Spence: Pretty much all of them. I like the challenge of what hasn’t been done before. And I think in the political arena you’re going to see a lot of revolutions, not evolutions. I think sports might have been the frontier, leading the pack, because people wanted more sports in their lives. A lot of people don’t want more advertising or business, but the fan base wants more sports in their lives. They demand it. Sports has created a way with the media to get more sports in people’s lives.

Q: In your anti-litter campaign, “Don’t mess with Texas,” you said that previous such campaigns targeted the Sierra Club, whose members don’t litter in the first place. The effective campaign, it seems, doesn’t preach to the choir. You have to know who your audience is and what you want to say to them.

Spence: That’s exactly right. It’s really interesting. Look at “Give a hoot. Don’t pollute,” which was a great campaign. And then you had Smokey the Bear and the crying Indian. They were all powerful, award-winning campaigns that reinforced the rightness of the people who did not litter. I was interested in finding the people who did litter. And so when we won the business, we appealed to pride, not to litter. “Don’t mess with Texas” became a rallying cry as powerful as you could have. [The message] wasn’t anti-litter. It was un-Texan to litter. And that’s why I think it worked so powerfully. And I think we can learn a lot from that lesson and all cause-marketing segments.

Q: I read in Business Week a claim that “Few ad incumbents ever win back a client’s business.” That hasn’t been true in your case. GSD&M has had long-term relationships with Southwest Airlines and Wal-Mart. Is that simply because you understand your client’s message?

Spence: You know, we’ve been lucky. We’ve had great relationships with these clients. The fundamental reason -- and the only brag note I’ll make on us -- is that we know we’re not in the ad business. We’re in the business to build our clients’ business. That’s what we do. We’re not always great at it, but we always try. And as I tell people many times, we’ll make a mistake, but we’ll never let you down. I think that’s been the key to our success: We’re in the business to build theirs, and if their business grows, so does ours.

Q: What’s the best new idea in advertising?

Spence: My favorite poet, T.S. Eliot, said that man shall never cease to explore but that when he’s done, you’ll go back to where you started and know it again for the first time. The biggest innovation goes back to 101 marketing. We were door-to-door salesmen when there was no mass media, no mass marketing. We went one-on-one. And now it’s going back to where it started: knowing again for the first time. It just happens to be the Internet, our one-on-one marketing. There are different tools and different ways, but it’s door-to-door now.

Q: Eliot also said, “If you aren’t in over your head, how do you know how tall you are?”

Spence: I know. I love that one. Isn’t it great!