MAKING THE LEAP TO MULTIMEDIA ONCE A MODEST AGENCY, TOBIN SHOP NOW FINDS FORTUNE IN TECHNOLOGY

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Tobin, Erdmann & Jacobsen's interactive efforts have gone from embarrassing to impressive in four years.

The Bloomington, Minn., agency crossed the interactive threshold in 1990, when it sent 100 computer discs to prospective high-tech advertising clients.

That first project, which opened with the booming theme from Stanley Kubrick's "2001: A Space Odyssey," featured black-and-white images of agency principals and samples of the shop's creative.

VP-Creative Services Scott Erdmann winces when Tobin's maiden interactive effort is mentioned and says he prefers that any surviving discs be tossed out.

Mr. Erdmann, 39, might feel differently about the agency's work today. Tobin, Erdmann & Jacobsen, founded in 1980 as Tobin Advertising, a traditional ad agency, is now a full-fledged multimedia company, and its fortunes are soaring.

Last week, Tobin added Chicago-based Ameritech to its client roster, signing a pact to install 45 interactive kiosks in the metropolitan Chicago area that enable customers to order value-added telecommunications services while shopping.

Mr. Tobin said the first kiosks, linked to Ameritech's database, will be located in Target discount stores.

Tobin is working for General Motors Corp., Mercedes-Benz of North America and Xerox Corp. through new client Clear With Computers, a Mankato, Minn., provider of sales automation systems. Also on the roster are Minnesota clients Honeywell, General Mills, IDS and Software Etc.

When Tobin mailed out its first interactive disks in 1990, the agency employed six and claimed $2 million in capitalized billings. Now, there are 22 employees, and revenues this year will amount to between $3 million and $5 million, agency President-CEO Paul Tobin said, based on capitalized billings of between $20 million and $33.4 million.

Although Mr. Tobin, 43, said the agency still handles the same volume of traditional advertising, that portion of the business has plummeted from 90% in 1992 to 60% in 1993 and an estimated 20% this year. The flip-flop represents a variety of computer-based sales training and incentive programs, kiosks and other multimedia projects.

Going interactive wasn't so easy, though.

Clients unfamiliar with interactive technology and doubtful about its widespread acceptance balked at hiring Tobin until 1992, when the agency reorganized and new media became more mainstream. At the time, Peder Jacobsen joined the agency from Training Innovations, a Minneapolis interactive training company. Mr. Jacobsen, 33, is now VP-technology services.

"We had huge interest in this. Only everyone was hesitant to be too much on the front end," said Mr. Tobin.

"We liken it to unsuccessfully tilling soil and planting seed. We kept doing that and planting seed until all of a sudden the rains came and things grew. Now we've got 5 billion tillable acres," Mr. Erdmann said.

Since the reorganization, the client mix has changed dramatically.

"We're getting in the front door now," said Mr. Erdmann. "We used to view interactive as a way to get in the door any way we could."

Mr. Tobin said the agency first committed to interactive technology in 1987, when Control Data spinoff Ceridian Corp. asked if the agency could create a multimedia capabilities presentation.

"When we saw the product, even in its rudimentary form, we said, `This is the future of communications,"' said Mr. Tobin.

Tobin has since abandoned most traditions of what Mr. Tobin termed a "mature" advertising industry in pursuit of high-tech clients and "engineered" marketing solutions using new technologies.

"Agencies used to build their reputation on a creative product," said Mr. Tobin, a copywriter when he opened his first agency in 1980. "Now there's an equally big part that's emerged. Not only do you need a creative solution in the 1990s, you also need an engineered solution."

The 1992 reorganization formed a three-pronged account service team for each client and a central database of digital marketing assets Mr. Tobin said helps crumble walls between a client's training, marketing and sales operations.

While much of Tobin's work focuses on training and business-to-business marketing, the agency is moving into the retail realm with kiosks it helped develop for Software Etc. The kiosks, installed in one store, are capable of giving customers demonstrations of CD-ROM products.

On the sales and training front, gone are the days of lugging trunks of sales materials to clients, Mr. Erdmann said.

Instead, Tobin's "Virtual Office" software provides on-site customer education via a multimedia laptop computer. Xerox currently is using the Virtual Office software.

The bullish Mr. Tobin predicted the agency will double in size during the next year and said interactive will become the default method of communication.

Agencies of the future, he said, "will be advertising firms with a slightly different complexion. They will be communications firms, only advertising will be imbedded in the [marketing] solution."

Besides, he added, "Why would anybody want to send a direct marketing letter when you can send an e-mail via computer and get instant feedback?"

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