It was just three months before Sept. 11, 2001, when Procter & Gamble Co. divested its former in-house commercial production studio, Red 212. Not quite perfect timing for an agency startup.
But a decade later, after spending most of its life focused on direct-response TV advertising, the once-captive agency has had an equally unlikely run of new general advertising business from a wide range of national marketers.
In the past year, the Cincinnati shop has taken on new work from Walmart, Chiquita and Newell Rubbermaid, plus substantial local and regional assignments from Gold Star Chili and Homemade Ice Cream. It's expanded work for P&G, most recently handling TV ads for a multibrand beauty campaign highlighting Allure magazine endorsements of several P&G beauty brands and another (non-direct-response) TV ad for the launch of Secret Natural Mineral deodorant.
Revenue last year for the 20-employee agency (with substantial freelance help) soared 129%, according to CEO Anne Chambers, with a strong double-digit, if not another triple-digit year, shaping up for 2011. And even with new work from P&G, Red212's former parent now only accounts for 40% of its business.
Ms. Chambers, who headed P&G's commercial production unit before outbidding some external production houses to buy it from her alma mater, planned all along to turn it into an ad agency. What she found pretty quickly, emerging into the maw of a recession, was that being a direct-response shop had some definite advantages in a downturn, when remnant airtime becomes plentiful and even traditional brand advertisers like P&G shift budgets there.
She made the move into DRTV just as P&G was starting to experiment with using direct-response time for its brands -- something that could get it much lower remnant rates just by adding appeals to respond for coupons or visit websites, in addition to occasionally selling products direct to consumers.
Redna was the name the unit went by at P&G, which wasn't one of those abstruse P&G acronyms, but a backward rendition of the first name of the real-estate developer for the modest building where the unit was housed in Woodlawn, Ohio. That's an industrial suburb not far from P&G's storied Ivorydale soap plant, which went up for sale in the same restructuring as then Chairman-CEO A.G. Lafley looked to shed things such as making bar soaps and TV commercials that could be done more economically by others.
Ms. Chambers originally shortened the name from Redna to just Red. But that drew trademark-infringement lawsuits from the Cincinnati Reds and Sony (which has a century-old "Red Seal" music label). In part to settle the suits, and in part to make it easier to find the agency on Google, Ms. Chambers added the "212," a reference to the Fahrenheit boiling point of water.
Red212 focused mainly on DRTV until recent years, including assignments for various P&G brands, Scotts Miracle-Gro and Bare Escentuals. But while traditional brand advertisers have stuck with DRTV, it's a countercyclical business that does best in downturns -- when remnant airtime is available -- and worse when things are going better and scatter markets tighten, as has happened the past two years.
In 2009, Ms. Chambers hired Don Perkins, a veteran of another Cincinnati agency, Northlich, as executive creative director to help move beyond the focus on DRTV. The idea behind "212," as Mr. Perkins sees it, is that "we can be the difference between 211 degrees, when all you've got is water, and 212, or between something happening or not happening."
Mr. Perkins said today the agency always looks at "the entire 360," even if it doesn't necessarily execute all of it for every client.
The direct-response heritage, however, has created a focus on accountability that still applies, Ms. Chambers said, which she believes has helped the agency win new clients. And while Red212 has moved out of its original spare building, its new digs in another industrial suburb, Fairfax, would make Sam Walton proud with the exterior's frugal industrial motif.
"While we want to do creative work that pleases us and delights our clients and thrills our peers," Mr. Perkins said, we also realize that you can't call it 'the work' if it doesn't work. We're keenly aware of the fact that what we do has a cause and effect to it."
Red212's new business in the past year has included producing some of the commercial pod "stories within a story" wrapped around ads during P&G's "Family Movie Night" co-productions with Walmart and the co-op ad for Walmart and Microsoft behind last month's launch of Kinect. Red212 also produced a Walmart corporate ad backing the National Council for Adoption that ran during one of those P&G-Walmart movies in January.
For Newell Rubbermaid, Red212 has picked up work for the Shurline paint brand this year. And for Chiquita, the agency has picked up work for a number of new products launching this year, including Fresh Express salads using the company's FreshRinse antibacterial produce rinse.
"I've worked with TBWA, BBDO and some others," said Amy Everman, manager of marketing and business for Chiquita's Fresh Express salads. "And I just can't tell you how down to earth, collaborative and honest they [Red212] are. They feel definitely like an extension of the brand and you at any given time."
The TV work, she said, produced some of the best copy scores she's ever seen, in the upper quintile of Ipsos-ASI test results. "I'm very lucky to have been able to work with them," she said.
Closer to home, new ads for Gold Star Chili -- striving to overcome Skyline in the Cincinnati chili war -- include bus ads that ask drivers to "Honk if you love three ways" (a three way, in Cincinnati-chili parlance, is a combination of runny chili, spaghetti and shredded cheddar).
For Red212, the growth beyond its origins as a P&G offspring making mostly DRTV ads leaves a bit of an identity crisis in what to call itself -- be it integrated marketing communications shop or just plain advertising agency. But it's settling more on the latter these days. "I never really gave up on the notion of an advertising agency," said Mr. Perkins, despite his doubts at times about the model.
"I gave up on it," Ms. Chambers chimed in, provoking some laughs. "But I came back to it."
OUT FROM THE SHADOW OF P&G
Red212's diversification reflects a Cincinnati marketing-services community increasingly moving beyond a set of captive P&G vendors.
To be sure, P&G has driven considerable growth among Cincinnati shops, with growth in the past year for WPP's Possible and Omnicom's Barefoot Proximity and independent Resource Interactive (which opened a Cincinnati office in late 2009 largely to serve P&G), all largely attributable to the packaged-goods giant. Cincinnati also has more big, 100-plus employee design shops -- including outposts of Omnicom's Interbrand and WPP's Landor -- than any U.S. city outside New York thanks largely to P&G. But last year, the biggest of those Cincinnati-based shops, LPK, also won a global assignment from P&G rival Henkel's laundry business, designing packaging most recently behind the launch of Purex Complete Crystals fabric softener.
A couple of Cincinnati's other biggest shops have even less connection to P&G. EmpowerMediaMarketing, one of the larger independent media shops in the U.S., with more than 160 employees, may have been founded by a P&G alum, but it now boasts no P&G business whatsoever. And Dunnhumby USA, the loyalty and database-marketing specialist owned 50% by Cincinnati-based Kroger Co., that has played a major role in sales results for Kroger and Cincinnati-based Macy's that have beaten most major competitors in recent quarters, has little P&G business and only a handful of P&G alums.