Merged Firm/IEP tackles Virgin Cola relaunch

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The Firm merged with Integrated Entertainment Partners last week, but the companies have already collaborated on a deal that signals the unconventional approach they will bring to product marketing.

The Firm, a Hollywood talent management and production company, and IEP, a branded-entertainment specialist, have collaborated on the relaunch of the Virgin Cola brand in North America. And, in an unusual move, they have bypassed creative boutique agencies and given responsibility for the brand's new campaign to a group of advertising students.

IEP partner Mitch Kanner, who will join the Firm, sits on the board of Virginia Commonwealth University's Adcenter, which is run by Rick Boyko, the former chief creative officer at Ogilvy & Mather Worldwide. Mr. Kanner and Dave Baram, president-chief operating officer at The Firm, gave students at the school strategic and creative responsibilities for the relaunch of Virgin to appeal to teens and young adults.

"Boyko's creative department never ages," said Mr. Kanner, who said he and Mr. Baram looked at several "highly creative West Coast ad agencies" before giving the assignment to Adcenter. "In this particular category, the people actually creating messaging are out of the category."

The move also reflects the lack of a big budget for the relaunch; the students won't get paid for their work but will settle for gaining real-world experience.

The Firm has a stake in the product's success; it created a joint venture with Virgin Chairman Richard Branson called Virgin Drinks North America in 2002. The agency is determined to avoid the disastrous results of Mr. Branson's first foray into the U.S. market nearly a decade ago. Back then, he tried to take on Pepsi-Cola and Coca-Cola in a volume play and was squashed. This time, the brand is being positioned as "more of a premium, private-label play" in the words of Mr. Baram, and will leverage its primary distribution deal with 7-Eleven.

The brand will launch regionally in June in California and roll out to Nevada, New York and Florida, with a national launch slated for early 2005. According to Mr. Boyko, the brief to his young charges stressed "the unique retail situation" with 7-Eleven. "With limited media dollars, we told the students to look at the physical environment as the principal [branding] medium. What could we do with wild postings and print components? How do we leverage The Firm's entertainment assets to create buzz?"

no consummation

Last year, The Firm sold its majority stake in sneaker brand Pony to Global Brand Marketing, handing over manufacturing and distribution duties while retaining marketing, along with its 40% minority stake. "We made a lot of mistakes on Pony in terms of getting too involved in manufacturing and the design of the shoe," said Mr. Baram.

Mr. Baram said The Firm made three "fully financed offers in conjunction with private equity firms on other brands last year" that weren't consummated. "But it demonstrated to us that the platform is really attractive to brand financing partners to go after brands together. Bringing in [IEP] will accelerate this process."

Mr. Kanner launched IEP with Rich Frank, former chairman of Walt Disney Television, who becomes chairman of The Firm, and Chris Gebhardt, a former Ogilvy executive, who will also join The Firm. The partners originally touted the company's "Switzerland neutrality" as a mediator between brands and entertainment. The merger marks a decided shift in strategy. "If entertainment is now the driver of commercial messaging, you need to be in the entertainment business. You can't be an intermediary," said Mr. Kanner.

Firm founder-CEO Jeff Kwatinetz and partner Rick Yorn keep their co-chairman titles. Terms of the merger were not disclosed.

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