Explosion of online companies' advertising heightens pressure on agency relationships

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In its quest to find an ad agency with the big idea, a dot-com that will go nameless visited a New York agency that also will go nameless.

"So they came in and sat down and said, 'The first thing we want to talk about is what celebrity spokesperson should we have?'" recalls an agency executive. "We all sort of started to laugh, but then we realized they were serious. They said because William Shatner and Priceline.com had done so well, that's the way they wanted to go.

"We pretty much knew the meeting was over then, but we let them finish before gracefully bowing out."

Welcome to the surreal land of the dot-coms. In this landscape, it's not always clear whether it's agencies pitching prospects or prospects pitching agencies in the quest to convert bucks from venture capital investors and stock offerings into viable brands and businesses.

For traditional agencies, the dot-com explosion means money, opportunity, creative freedom and unimaginable frenzy. Advertising Age went out in search of what life is like in the era of the dot-com pitch, finding a host of bizarre tales.

Runaway bride
Brian Goodall, president of Hampel/Stefanides, New York, recalls reading that his agency was one of three finalists for a dot-com account. The only problem: He'd had two phone chats with the prospect but hadn't yet met the client.

"We hadn't even had a chance to date" and the agency and client seemed to be on the aisle to marriage, he says.

The agency withdrew.

Barking up a new tree
San Francisco shop Swirl has had experience with two pet projects: The agency, approached at the same time by Petstore.com and Petopia.com, went with Petstore since its venture capital funding looked more secure. But three weeks after the agency signed on, the client's VP-marketing was gone. That night, Petstore told the agency its new marketing strategy would emphasize online. Swirl didn't think the strategy would work and resigned.

Swirl then contacted Petopia, in the midst of a review. The agency won the account and produced a full campaign--all within three months from its first contact with the two pet stores.

"I used to work on Clorox at Foote, Cone & Belding, and it took us a full year to figure out a campaign for a new bleach," says Eric Roos, partner and director of account planning at Swirl. In contrast, pitching dot-com business is "like drinking water out of a firehose."

The French connection
Big-budget dot-coms are a tougher challenge.

Take the pitch for AltaVista's $50 million-plus account. "It was the second-smartest pitch I'd ever seen since Hal Riney's first pitch for Saturn," says Jeff Atlas, a former agency executive who served as an adviser on the pitch.

Mr. Atlas put Wieden & Kennedy, Portland, Ore., in the ring as soon as he read on AdAge.com that the agency had parted with Microsoft Corp., which owns the competing MSN Network. Within three weeks, the agency shot and edited focus groups from six nations and showed a commercial directed by Joe Pytka, who returned from France for the shoot.

At the end of the pitch, Wieden addressed how it would service the account: A map flashed on the screen with a dotted line joining the four blocks between AltaVista's headquarters and an office Wieden already had rented.

Wieden won the account in the pitch that included DDB Worldwide, Los Angeles, and a third, unnamed agency.

And on the 7th day, they rested
Steffan Postaer, the creative director instrumental in Leo Burnett USA, Chicago, getting the estimated $20 million Art.com business this summer, says it will take one month from the time Burnett inked the deal to the mid-September rollout of a national print and outdoor campaign.

"I've never seen anything happen that quickly," he says. "Even that to them [was longer than they wanted to wait]. They wish they could've been out sooner."

Online marketers have almost a SWAT team mentality, he says.

"They are much more fly-by-the-seat-of-the-pants. They don't feel the need to talk about things ad nauseum. I'm used to that. I'm used to clients with a lot of money and lots of issues and lots of people. With most dot-com businesses, you have a CEO who has basically been there three weeks," he says. "They're all shooting for white heat; there is nothing in between. . . . They're pioneers, not process-oriented people."

Abracadabra: Now you see it; now you don't
Dot-com budgets are about as predictable as dot-com stocks.

Online trader Datek Online started a review with a $50 million ad budget, but in the middle of the review it delivered good news to competing agencies Bozell Worldwide, Publicis and Grey Advertising, all New York.

A trio of investors anted up $300 million in additional backing, upping the ad budget to $100 million. But, near the end of the review, one investor got cold feet. Unfortunately, he was Paul Allen, Microsoft Corp.'s co-founder and the third richest American. Good thing for review winner Bozell: The other investors hung in, and the budget settled at $80 million.

The agency has many reasons to hope for Datek's success. Bozell is said to have agreed to take a stake in the company as part of compensation.

Show me the money. Faster.
Jef Loeb, partner and co-creative director, Katsin/Loeb, San Francisco, says the dot-com deluge has brought a number of firsts. For one, the board meeting of a publicly traded company, client CyberCash, was held in his office's conference room.

Mr. Loeb says life for agencies trying to operate at Web speed in what he calls a "testosterone-driven" environment poses challenges for creatives who "believe in the craft of presenting fine and polished work."

After the board meeting, at which three campaigns were presented, the work aired just four days later.

"There's no negotiating copy," Mr. Loeb says. "You find a way to make it happen," putting photo shoots together in a couple of days, "looking at directors even while we are concepting" the ad strategy.

On the flip side, the agency is once again king, says Mr. Loeb.

"The agency viewpoint prevails without dickering," he says. When an agency makes a suggestion, the client says, 'Yes. Make us famous as fast as you can.' "

Wacky idea grants a license to kill
Agencies also find themselves the arbitors of new-business ideas.

Brian Hurley, partner at Grant, Scott & Hurley, San Francisco, says License to Mail called his office to talk about advertising. The product concept was a bumper sticker placed next to license plates. By combining the license plate number with @licensetomail.com, passersby could send an e-mail to the person driving the car.

Mr. Hurley and his partners considered the broad social implications of the service.

"When you cut someone off on the freeway, they don't have to shoot you," he says. "They can send you an e-mail instead."

The agency declined to pursue the offbeat idea.

It's my party and I'll cry if I want to
An East Coast agency got its own little lesson on the Internet from one prospect. A man who had been part of a successful Web company cashed out and quit to start his own company. He asked for and got a meeting with the agency to talk about his idea, beginning with "What is the Internet and where did it come from?"

Someone politely pointed out the agency, having had several Internet clients for a number of years, really didn't need a primer. He turned to the group and said something along the lines of, "Maybe you don't, but this is my presentation."

The long-winded financial discussion of how his new e-commerce initiative would make buckets of money was for naught; the agency "suddenly" realized it had a conflict and withdrew.

In 1 door and out the other
Jim Walker, managing and creative director, McCann-Erickson Worldwide in Seattle, says dot-coms require "a greater sense of intuition" on the part of agencies.

"There's not a lot of time to look backward and not a lot of information that's going to predict the future."

"It's a yes/no culture," he says.

Mr. Walker's office worked on a project basis to launch Drugstore.com, which in the first six months of this year plowed $2 into advertising for every dollar of sales. Ad spending: $9.2 million. Sales: $4.2 million.

"I imagine it's like what advertising was like in the '60's, when everything was new and being reinvented," he says. "You're building brands from scratch, not repositioning them. There's a purist feeling."

Mr. Walker recalls how Drugstore.com CEO Peter Neupert, leaning against the wall of his marketing chief's office, approved the campaign that ran before and after the site's IPO last month.

"He never sat down. There were no pleasantries," Mr. Walker recalled.

A few days later, Drugstore.com was out talking to other agencies. Dot-com relationships come and go, as quick as a click.

Contributing: Hillary Chura, Laura Petrecca, Beth Snyder

Copyright August 1999, Crain Communications Inc.

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