Small agency TBD to close
TBD, the San Francisco agency led by CEO Jordan Warren and Chief Creative Officer Rafael Rizuto, is closing its doors.
Warren confirmed the decision in an interview with Ad Age, saying the coronavirus pandemic has “pushed out or canceled” most of the projects the agency had in the works and ultimately caused its collapse. The closure underscores the pressure small agencies are under during the best of times, and how the pandemic can exacerbate existing pressures or become a tipping point.
Warren and Rizuto had founded the small shop with former IDEO exec Virginia Wang in 2017 amid a startup boom. While Wang left the shop in 2018 to become an independent consultant, the agency went on to create out-of-the-box work for clients including Stubhub, Havaians and the Ad Council.
News of the agency’s closure follows reports of Rizuto joining BBH New York as its new chief creative officer, replacing Gerard Caputo who left in January to become a creative director at Wieden+Kennedy.
"We are delighted to have Rafa bring his ideas-driven creative approach to our New York office,” a BBH spokesperson says. "He has a remarkable track record of developing brilliant ideas that people care about, for everyone from big brands to pro-bono organizations. He will be the ideal leader for our creative department and an incredible asset to our clients.”
Warren said the agency’s future was uncertain when Rizuto got the call from Publicis Groupe-owned BBH and the duo made the mutual decision that it was best for him to take the opportunity and for TBD to close up shop.
“We’re incredibly proud of everything we accomplished,” Warren said. “We have a wonderfully talented team and have created incredible work but no one could have expected COVID-19.”
He said a “fantastic opportunity” arose for Rizuto and he wishes “nothing but the best for him." He added, "We put everything we had into TBD and if the circumstances were different, we wouldn’t be having this conversation.”
Warren said the agency had previously housed a staff of 15 to 20 people but had scaled down when the pandemic first hit. All of the staff has been alerted and Warren said everyone anticipated the shuttering beforehand so there were no surprises. Clients have also been contacted and Warren said there is still “some work in the pipeline that I’m not at liberty to talk about but, of course, the timing of it has been put off indefinitely.”
“Leaving TBD is bittersweet,” Rizuto said. “I have never learned so much in my entire career and the agency gave me a real sense of purpose and humility. I coudn’t be prouder of the work we’ve done and the team we built. It was a hell of a ride and I’ll forever be thankful and love TBD.”
Bigger pitches, more expenses
Even before the coronavirus pandemic forced businesses to shut down and a significant amount of advertising to pause, Warren noted that TBD was struggling as a small agency to compete as costly long-term reviews drained resources.
“As our brand and reputation grew, we were invited into bigger and bigger pitches," Warren said. "While we were excited about the recognition we were receiving and the kinds of opportunities we were being considered for, it’s tough for a small agency to afford the kind of investment it takes to participate in three- or four-month reviews against larger agencies with deeper pockets and more resources. Our ideas carried us to the finals of several big pitches but the process drained us of the cash we needed to move forward."
Prior to TBD, Warren had opened a pair of other San Francisco-based shops, Argonaut and Eleven, and had also worked as a marketing exec at IBM.
Brazilian native Rizuto had made his creative mark at agencies including 180 L.A., Ogilvy Brasil and Pereira & O’Dell in San Francisco. His calling card has been work that doesn’t easily fall into typical categories. While at 180, he helped create the double Cannes Lions Grand Prix-winning “Boost Your Voice” campaign for Boost Mobile, which turned the mobile retailer’s locations into voting stations for underserved communities. While at Ogilvy Brasil, he was part of the team on a Hellmann’s campaign that printed onto grocery shoppers’ receipts recipes consisting of ingredients they just purchased, including the brand’s mayo.
That thinking carried into the work at TBD. The agency’s holiday campaign for StubHub, which was presented at Ad Age's Small Agency Conference last year, allowed customers to gift their loved ones event tickets with an AI-generated rap song, while a pop-up AR-enabled retail idea for Havaianas allowed consumers to purchase the brand’s flip-flops directly through a vibrant mural on the Venice Beach boardwalk.
More may be coming?
Still, great work isn't always enough. The landscape has become increasingly tough for small agencies, even prior to the coronavirus pandemic, with marketers taking more work in-house and shifting to project work. At the beginning of 2020, Barton F. Graf, one of advertising’s most creative players, shuttered after 10 years. At the time, Founder Gerry Graf said the decision followed “a perfect storm” of events including major client spending shifts.
“Small agencies have it the hardest,” said Nancy Hill, founder of Media Sherpa. “They are small businesses like any small business you frequent. If they have to shut down projects, they have no money coming in.”
Hill said “it’s sad whenever a business has to close” and she predicted TBD will likely not be the only agency closure the industry sees as a result of the pandemic.
“This has happened virtually anytime we’ve had major economic downturns,” she added. Look what happened in 2008 and 2009; some of the agency [executives] that [shuttered shops] ended up starting new agencies. That will happen again.”