Earlier this month, the agency's largest client, Pepsi-Cola Co., launched its most significant urban-marketing effort for its flagship Pepsi brand featuring the musician Wyclef Jean (AA, April 9, P. 1) with the help of UniWorld Group, an urban marketing shop 49%-owned by WPP Group. UniWorld also was behind Pepsi's Mountain Dew spot featuring Busta Rhymes, which continues a three-year-old relationship with the rapper. Mr. Rhymes is expected to help launch the Mountain Dew line extension Code Red for the urban market later this year.
This is the kind of business BBDO, owned by Omnicom Group, hopes to capture with its new venture, called S/R Alliance. The alliance bundles a group of shops under one unit led by two managing partners: Mark Stephen-son Strachan, former founding partner and chief operating officer of Vigilante, an urban marketing subsidiary of Bcom3 Group's Leo Burnett; and Mark S. Robinson, the former UniWorld exec VP who helped launch Spike/ DDB with film director Spike Lee.
"If our clients want it, we have to be in a position to be able to bring [multicultural resources] to the table," said John Osborn, BBDO exec VP-integrated marketing, who was responsible for bringing the concept to the agency. "The Marks, and that's how we refer to them, are going to be involved in any and all of our initiatives."
Participating shops include Element, a youth data and insight research outfit; Unity Media, an African-American media buying and planning independent; J. Curtis & Company, an African-American advertising agency; MSSR Corp., a management consulting firm; and Dream Team, an urban guerilla marketing company, all based in New York; along with Millennium, a Hispanic field marketing and sales promotion agency based in Elizabeth, N.J.
"It is not a typical minority ad agency that we are affiliating ourselves with," explained Bill Katz, president-CEO of BBDO New York. "It is a consortium of experts in the minority mediums that range from advertising to field marketing to promotion, to guerilla marketing to strategic acumen." S/R Alliance falls within BBDO's integrated marketing department, led by Mr. Osborn and which includes BBDO's online agency @tmosphere and its sports marketing alliance with Bombo Sports & Entertainment (AA Oct. 30).
Mr. Katz acknowledged BBDO's integrated initiatives are primarily focused on servicing the agency's existing clients and winning over all their business, especially the work farmed out to other shops. "Over the last few years, that's what we've been trying to do," Mr. Katz said. "This is not the typical integrated marketing thing simply to say we are into it. We are actually going out and finding genuine expertise and real value added in these nontraditional advertising mediums for our clients."
Although the partners are calling S/R a holding company, it does not appear to fit the strict definition of the term. The founding partners said the company, whose offices are at BBDO's headquarters in midtown Manhattan, is private and 100% minority-owned, but refused to identify the owners, or whether one company owns a piece of all the participating agencies.
Mr. Katz would only say, "We have a financial relationship with them." Mr. Katz also said S/R is already talking about assignments with BBDO's clients but would not identify which ones.
"We haven't had one conversation with Pepsi about this," said Mr. Osborn. "But any of our clients will benefit from talking to the Marks."
BBDO has had little to no track record with multicultural business. Did that fact have any bearing on the founders' decision to work with the agency? "BBDO has an awareness and a respect for the multicultural market," Mr. Robinson said. "They see it as a huge business opportunity."
Mr. Strachan concurred: "This is big business. This is no longer about fun and sharing and feel good stuff. This is business, it's all about moving goods and services."
In tapping into the urban, youth and multicultural arena, BBDO will have to play catch-up to other agencies already in this growing segment, such as Vigilante, Interpublic Group of Cos.' Deutsch with its DRush division, and AG Worldwide's PASS.
According to Alfred Schreiber, president of minority executive recruitment firm U.S. Alliance Group, and the author of "Multicultural Marketing. Selling to the New America," multicultural groups make up 30% of America's population, yet only 1% of the almost $240 billion spent annually on advertising is directed at ethnic consumers.
"Advertising agencies are not known for their groundbreaking initiatives," Mr. Schreiber said. "Eventually, all of the agencies will have multicultural departments, but I think what is really more important is that the clients say to the agencies that they need this. When the former chairman of Procter & Gamble said the Internet is the thing, everybody went nuts establishing online groups at agencies. That's all it took, one big spender."
He added, "That has not yet happened in the multicultural arena. The big spenders have not weighed in. ... So it remains kind of a fringe initiative at most agencies and with most clients."
Messrs. Strachan and Robinson believe multicultural marketing is still considered fringe because the current model is wrong. "Agencies have developed these in-house resources," Mr. Strachan said, regarding multicultural in-house operations like DRush. "As any client will tell you, that has failed, the agencies swallow up these resources whole, without any sensitivity to the culture within. The passion goes out the door."
According to Messrs. Strachan and Robinson, S/R is an attempt to create a relationship with a big ad agency without sacrificing the separate cultural identity of the shops. "This takes multicultural marketing to a new level," Mr. Strachan claimed.