It's added $50 million in billings from Quaker parent PepsiCo, supplementing the marketer's original $350 million parked at Element 79. It's firmly established its creative reputation with spots such as the elaborately cut Gatorade commercial that ran on Super Bowl XXXVII and stars Michael Jordan battling his younger self in a pickup game. But more importantly, the shop that Pepsi built is surprising observers with a succession of invitations to hot creative reviews. Since September, Connie Nelson, senior VP-director of new business, has coordinated visits with at least six agency consultants and overseen five new-business pitches. Element 79 made the finals in each case.
The agency has pitched for H.J. Heinz Co.'s pet food, travel site Orbitz and the Chicago Mercantile Exchange, among other accounts, but it wasn't until December that Element 79 scored its first win, with the $15 million Regis Corp. Supercuts account. Now, it's among the contenders for an enormous plum, the $145 million Capital One account, pitching with sibling Abbott Mead Vickers, London.
That's a substantial achievement, considering Chicago agency history is littered with agencies-such as Ammirati Puris Lintas and Backer & Spielvogel-opened locally for a single client and later shuttered after failing to evolve.
Observers give Element 79 credit for its ability to aggressively pitch new business despite its dependence on Pepsi. "Often, those kinds of single clients can be viewed as a 10,000 pound gorilla," said David Beals, CEO of agency consultant Jones Lundin Beals. Winning new accounts "is not always easy to do when your roster is dominated by one client."
While Brian Williams, president-CEO at Element 79, won't divulge the agency's results, he said the shop has exceeded all its goals. "It could have been a lot more difficult," said Mr. Williams. "When I look back I'm really surprised at how easy it was."
Element 79, named for gold's number on the periodic table, was formed in September 2001 by Omnicom Group to service PepsiCo after the client yanked its business from FCB Worldwide, Chicago. Pepsi left after FCB parent True North Communications was purchased by Interpublic Group of Cos., causing a conflict with key Interpublic client Coca-Cola Co. After a messy court battle in which FCB sued to keep the spin-off agency from poaching clients, Mr. Williams and his team set up shop under the temporary moniker NewCo, but didn't open officially until February, 2002. Two-thirds of its 130 staff moved from FCB.
Critics sneered that Element 79 eventually would be folded into sibling DDB Worldwide. It didn't help that the agency shared office space and some back-office functions with DDB. Nor that its new-business options in such categories as beer and fast food would be severely limited by conflicts with DDB's clients Anheuser-Busch Cos. and McDonald's Corp.
"I think part of their success is connected to part of the naysayers' cynicism about their possibility of success," said Tom Collinger, associate professor of the Integrated Marketing Communications graduate program at Northwestern University. "They weren't born a captive shop. They were born by a management team who had very broad experience."
"We're an amalgam of a lot of cultures," said Martin Sherrod, exec VP-managing director, operations chief, and the self-described "Episcopalian Minister" of the management team. He noted his past connection with Chief Creative Officer Dennis Ryan, when they both worked at Needham Harper Steers, and common bond to FCB Worldwide with Mr. Williams by way of Bayer Bess Vanderwarker. A bit of Leo Burnett Co. is also in the agency's DNA, due to Mr. Williams' tenure there. "I love the bloodlines of this place," said Mr. Sherrod.
"We're a little bit of a hybrid agency," agreed Mr. Williams. "We have the talent, experience, discipline and approach of large agencies, yet it's in a much smaller environment with the nimbleness and operational efficiency of a startup."
"We've had very senior level people involved in even what would be considered the day-to-day management of the brand," said Cindy Alston, VP-equity communications and equity development for Gatorade. "Element 79 is a great blend of the best and brightest of the old Gatorade team and some new, fresh personalities and really strong leadership," said Ms. Alston, adding that while the quality of the work is as good under Element 79 as it was under FCB, the breadth is greater.
Mary Kiley, VP-marketing for Regis, said Element 79 "created a personality" for Supercuts in a category where there is a perceived sameness.
"The dirty secret of this business is that a lot of people talk about great creative but don't really have an understanding of how to get it," said Mr. Ryan, who is currently juggling six different shoots. "There isn't a brand here that doesn't have a story I'm really fired up about."
Element 79 marked a real turnaround for Mr. Ryan. When he left WPP Group's J. Walter Thompson, Chicago, to join the new shop, JWT's creative was under fire, with critics panning as mediocre or controversial the work on the key Miller Brewing and Kraft Foods accounts. Mr. Ryan admits local agency executives were questioning whether he was past his peak and said his own comments about the FCB creative reel put him on the defensive even before he set foot in the new agency.
"That was not an easy situation for him to come into and I think he's done an amazing job," said Danny Schuman, Element 79's senior VP-group creative director.
"We had to prove to [Quaker] and rest of the world to not just sit here and be content," said Mr. Schuman, crediting the leadership of Mr. Williams and Mr. Ryan. "They don't settle for something we think is good if they think it can be better."
But Element 79, with its roster so heavily dominated by Pepsi, still has a long way to go to prove itself via new wins. "What success means for every agency is best viewed through a longer lens," said Northwestern's Mr. Collinger. The true acid test "is how an agency continues to evolve," he said, citing as an example Omnicom's BBDO, Chicago, which even after 70 years is still viewed largely as a captive shop for Wm. Wrigley Jr. Co.
But patience and willingness to persevere is one of Mr. Williams' strong suits. "Our fate will be determined in the next three years," he predicted. "If we bring in clients, we'll shed that perception. If not, we'll cement it."
contributing: hillary chura