LOS ANGELES (AdAge.com) -- When Palladium Boots was looking to relaunch its brand in the U.S. as well as key countries in Europe in 2010, the heritage footwear (recently acquired by K-Swiss) went to shop around its revamped account with the usual roundup of creative agencies and one less-typical candidate -- Virtue, the in-house ad agency of Vice magazine.
Barney Waters, Palladium's VP-marketing, had worked with Vice during his previous stint as a marketing VP for Puma, but hadn't given much thought to them as long-term creative partners, particularly with an agency-of-record relationship. But after sitting through a presentation about the evolution of the 15-year-old Vice and the 5-year-old Virtue, his perception had permanently shifted. The two units have worked together and independently to document and serve the uber-elusive hipster youth market through branded content on platforms like the magazine's video site VBS.TV, MTV (Red Bull's "School of Surf" series) and Dell's Motherboard.TV. Vice may just be the "hipster whisperer" for marketers, letting brands know just what kind of messages will resonate with its audience.
"I knew advertising these days is really content-driven, so I was really looking for the best creator of that content," Mr. Waters said. "They're proven as having a credible voice to their consumer, because they're doing what all brands need to do -- create content consumers want to watch."
Starting in January 2010, Virtue will serve as the agency of record for Palladium's global creative and media accounts as the boot expands its relaunch campaign into countries like the U.K., Germany, Holland, Hong Kong, Japan, the Phillippines and Taiwan in the coming months, all markets where Vice has a presence.
If Palladium and Virtue seem less unlikely of bedfellows than they would have five years ago, it's because their new pact is the latest advance of a trend that's been transforming the media industry for years. Media companies have been working harder to staff up their creative services groups to secure more advertisers, whether it's cable networks producing co-branded commercials for sponsors or magazines partnering with brands for custom in-book content, events and occasionally covers.
What's unique about Virtue's relationship with Palladium and several other brands it works with is that, as the brand's full-service agency, Virtue is often buying ad pages and online ads in Vice-competitive publications on its clients' behalf, as well as creating campaign work that will live in places beyond just the pages of Vice or the VBS.TV home page.
Eddy Moretti, Vice/Virtue's creative director, said the lines between media company and agency are only continuing to blur to create more efficient relationships both on the production and billing fronts.
"When we were working with some brands and their existing agencies, it wasn't good for the production agency, the media agency or the creatives because everyone was making a margin off the client every step of the way. But we can do the same work for brands and it'll be much more cost-effective for the clients to cut down on three stages of extra billing."
Not that Virtue is opposed to working with agencies. It recently partnered with Crispin Porter & Bogusky for a series of spots for the anti-smoking "The Truth" campaign that aired on MTV, and meets with other agencies like Wieden & Kennedy to discuss possible client partnerships.
The 500 global Vice employees and 50 Virtue staffers are expected to multitask, with many filling multiple roles with the magazine, the agency and the production of VBS.TV. Mr. Moretti argued that having such a nimble workforce is what has helped it secure many of its recent long-term clients.
"We'll get calls where we don't know if it's going to be a $1 million deal or a $10 million deal, the question is always, 'How fast can you ramp up to get this project executed in six different markets?' Or, 'Could you activate six markets in a week?' And we have a lot of resources across the company to make sure these things can scale quickly."
Dell's "Motherboard," for example, was a project that started as a branded web series for VBS.TV that eventually led to a three-year contract working directly with the company, with plans to extend the franchise to a "Motherboard"-branded virtual conference and eventually its own TV series.
"We have meetings every week where they treat us like an agency, and we find ways to include them in what we do," said Spencer Baim, Virtue's founder. "They let us do what we do as youth experts, we listen to them, but the goal is to make sure we create engaging stuff that's highly authentic."
Although the increased Virtue activity has had a halo effect on ad pages for Vice, which has a domestic circulation of 1.2 million, as well as revenues for VBS.TV, which reaches a monthly unique audience of 4 million, oftentimes the work is finding life outside of Vice-branded properties. "Oil of L.A.," a short-form documentary about secret oil rigs in the Los Angeles area and the first project to come out of Palladium's work with Virtue, was covered by the likes of the L.A. Times, the Sundance Channel and the Huffington Post as news content.
Said Palladium's Mr. Waters, "A magazine staff isn't a bad place to go if you need a photo shoot or a video crew. We're in a nice position now where our biggest issue isn't keeping up with creative staff, but that our boots are already sold out in most of the key styles."