"This Woman Scares Big Agencies" screams the headline from the front page of a recent edition of Ad Age. The line is accompanied by a picture of Coca-Cola's creative chief Esther Lee and an article about the brand bringing planning in-house and cherry picking the best creative shops regardless of global agency alliances. Some would argue that there are many more scary things about Coke, but the company is not unique in its enthusiasm for sampling the succulence of sweet, small creative fruit. Which means that the latest wave of startup shops could be more than another passing trend. Yes, the business, in the last several years, has seen more "new models" than an Axe casting session, but the general ad/marketer M.O. has made it difficult to actually do anything new. That could be changing. Maybe.
While the network shops have recruited big-name creative forward thinkers to assist them in the transition from dinosaurs-in-waiting to multiplatform idea factories, a new wave of new breed shops has gained momentum among some top tier advertisers. Their arrival comes at an opportune moment, when the the industry seems starved for new thinking and fresh ideas, and chunks of client budgets have been migrating conspicuously away from so-called traditional fare like television and print to what some might still consider "alternative" marketing approaches. It comes as no surprise then that this new group of startups, many of which have cropped up in New York, have been configuring themselves to address these very changes. They're a polymorphous, media-agnostic crew, their DNA incorporating varying degrees of adherence to traditional advertising disciplines, design, guerrilla marketing, branded content, even content ownership-any tool, they say, that can be used to solve not just your creative crunches, but your greater marketing problems. Also gone are the thick process layers-the newcomers all partake in fat-free structural diets, promising clients immediate access to top creative talents and strategists. As a whole, they could pose a challenge to the traditional agency model, or at least contribute to seismic shifts in the industry as we know it.
Who are these challengers? Some are collections of ex-hot shop creatives; some are truly multidisciplinary partnerships. New York's Amalgamated, established two years ago by Jason Gaboriau, Charles Rosen, and Douglas Cameron, former Cliff Freeman ACD, EVP/ director of business development and director of business intelligence group, respectively, has been one of the most vocal and busy of the new generation shops. It first appeared with the cheeky branding campaign for the Fuse music network, and since then has built an impressive lineup of clients: Ben & Jerry's, Svedka vodka, Belgium Breweries' Fat Tire beer, and, most impressively, the $50 million account for Cablevision's Optimum family of products. The founders have structured their new agency around the idea of "cultural branding," a concept that partner number four, Douglas Holt, a former Harvard professor and now the L'Oreal Chair of Marketing at Oxford University, conceived and detailed in a book How Brands Become Icons: The Principles of Cultural Branding. He found that the most successful and enduring brands, like Mountain Dew, Corona and Coca-Cola are those that are able to connect deeply with consumers by becoming culturally relevant-and challenging-icons. It's also the thinking that the foursome has earnestly been applying to its client strategies. "We see cultural branding as the future of marketing," notes Cameron, who is currently collaborating with Holt on a second book, How Brands Become Myths, on how agencies can adjust their models to accommodate the branded culture philosophy. "At Amalgamated, the strategic process, cultural branding, makes the creative work feel bigger, more provocative, more interesting. We're not focused on the minutiae of focus groups, we're focused on the macro level of what turns brands into icons. We care less about individual psychology than about herd mentality. We care more about effecting or fanning broadscale cultural changes. We strive to turn every ad into a cultural statement. We don't target consumer segments, we target the national dialog. We don't try to mirror the average consumer; we try to take provocative, alternative stances in culture."
Amalgamated's particular approach requires that the agency mature horizontally so that each client can work with a senior team of creative, business and cultural strategists. "Appropriately, we needed to not just shift how we deal with strategy but all of creative development and production, and all of our hiring practices to focus on how do we create culturally relevant brand work," notes Rosen. The shop, now 30-strong, recently expanded to Toronto, with the addition of senior level creatives Peter Ignazi and Carlos Moreno, the multiawarded pair from Canadian agency Downtown Partners DDB who were behind the "Bud Light Institute" campaign and who now oversee Ben & Jerry's and Cablevision.
Steered by multiple senior talents, many of the newcomers promise a direct lifeline between agency and client. Mono, Minneapolis' Michael Hart and Chris Lange, the former Fallon team behind the award-winning PBS "Be More" campaign and the Cannes Media Lions Grand Prix-winning campaign for Archipelago, along with managing director Jim Scott, an account-side vet from Carmichael Lynch, like many of this startup generation, founded their year-old shop on the notion that "simpler is better," bringing senior level talent to a hands-on level with each client. "We noticed a shift in the industry in the way that clients were wanting to engage with agencies," notes Hart. "It was all about gaining access to the best talent. They weren't looking for capabilities. They weren't looking for process. On the other end of that, we reflected back on those times we enjoyed the process most, when we thought the work was going to be best and when the client was happiest, and that's when the team was senior, smart and seasoned." Mono's client roster includes Sesame Street, Airstream RVs, and USA Networks, and unlike its new agency colleagues, it has allied itself with a network, MDC.
"At any large agency at any given time, there might be two people working on your business-that's actually the best- or worst-kept secret in advertising," says Ernest Lupinacci, the successful longterm freelancer who less than a year ago launched Anomaly in New York, with a braintrust of multidisciplinary partners: former TBWA/Worldwide COO Carl Johnson; Justin Barocas, previously a W+K/N.Y. media strategy director; and Andrew Kibble and Jason DeLand, both formerly of Grey Worldwide branding division G2 Worldwide. The latest additions to the team include Johnny Vulcan, former senior project director at Publicis' Fahrenheit 212 and Sal LaGreca, previously worldwide CFO at McCann WorldGroup. Here too the agency is structured for innovation and multidisciplinary problem solving-not just the partners, but every member of the 25-person team contributes on every project on all levels. The advantage, says Lupinacci, is that clients may come in through one door for one thing, but can end up working with the partners on other marketing tasks. That's apparently what went down with the shop's much buzzed about win of the Dasani account, a $20 million chunk of Coca-Cola's $2 billion yearly marketing budget.
"We were all working on the packaging long before we knew we were going to do anything for Dasani other than that," Lupinacci explains. That opened the door to the entire branding assignment, for which Anomaly went on to produce a series of Wes Anderson-directed spots featuring animal-suited actors expounding on the taste of Dasani on oversized sets. "We pride ourselves on this notion of giving a marketing solution that will manifest itself as a creative idea," Lupinacci says. "We're not going to start with a creative solution. If all we wanted to do is create great advertising, we'd do that. If the mantra from the last 25 years of advertising is 'The work, the work, the work,' we're sort of 'The brand, the brand, the brand.' Our sense is, What's the marketing problem? We've literally gotten into conversations with clients about distribution channels. Selfishly, we want to do that because it's the most creative thing we can do. We've been approached by some clients you can argue are more the traditional ones an agency would get approached by, but we sort of turn them down because we're not actually a boutique agency."
Indeed, for many of these shops, "boutique" is a four-letter word, as it implies small-project work as opposed to "big ideas," which is what these newcomers overwhelmingly offer. The television work for Dasani is perhaps the most apparently "traditional" of the work that Anomaly has produced so far, but it's the tip of a branding iceberg that stretches from website development to packaging, naming and promotions. The crew is also collaborating with ESPN Wireless' licensing group in support of its products like ESPN Bottomline Pro, GameCast and Player Tracker, but going beyond providing marketing services and working on product and content development, too. The shop's been appointed by a new VOIP (Voiceover Internet Protocol) company to handle everything from naming, corporate ID to even product refinement and all marketing communications; it's also in development with Black Book on a wireless platform that can be integrated into the company's entire media portfolio. "Ultimately," says Lupinacci, "this is more than an ad campaign, but rather a brand extension." Which is, like the iPod is to Apple, he notes, a "better ad for the brand than an ad."
On the opposite coast, another crew of well-pedigreed partners have gathered at 72andSunny in El Segundo, Calif., with a second headquarters in Amsterdam. Collectively, they're comprised of Glenn Cole and John Boiler, former senior talents from Wieden + Kennedy/Amsterdam and Portland; client-side big gun Greg Perlot, a former account director at Microsoft; and Robert Nakata, a much-decorated international designer. Their collective CV includes work for blue-chip clients like Siemens, Coca-Cola, Microsoft and Nike. Given their experience on successful multifaceted campaigns in the past, "we've been very particular about not creating a way of working that we can apply to any client we start a relationship with," notes partner Boiler. "If there's any one thing we do, we just sit and listen, and go from there." The shop is currently involved in helping to push sportswear brand Quiksilver over the billion-dollar hump with an athlete-centric online campaign as well as TV. Globally, the shop is currently working with Microsoft Xbox on a worldwide strategy project and with a number of undisclosed overseas brands looking to establish a global presence-something they've achieved in recent months for Dutch stroller brand Bugaboo, which they've helped to put on the map in the States with a design-driven campaign that included a gorgeous "daytrip" website for parents and babies on the go.
Design is not just a component, but a keystone to the thinking at 72andSunny and many of the other startups, which hold fast to the belief that a design-savvy approach leads to deeper, more effective branding strategies. "Because of the way we approach work, there's definitely a pretty heavy design sensibility we're looking for," notes Boiler. "We need people with good design skills as well as good TV skills. It's a really difficult fit because a lot of classical art directors might be good TV people conceptually, but have dubious design skills. That's why agencies bolt on sort of artificial design arms, so that their classical trained conceptual art directors don't have to be exposed for their lack of executional skills, not to put too fine a point on it." Not surprisingly, design is integral to the approach at Attik, which recently reopened in New York and in the past year has flexed branding muscle on its launch of Toyota's Scion marque in the States, via a multitiered campaign that involved everything from broadcast, wildpostings, and events. "Agencies are having to change their perception to better match the new client demands, yet many do not possess branding experts in-house," notes N.Y. president Will Travis. The shop's background in design, he says helps it to create for its clients the type of integrated branding they are seeking. "We consider ourselves the new breed of creative agency," he says. "Integral brand strategy and a unique design aesthetic produces advertising grounded in a totally unique manner. We take brands to a new place by engineering their new product, service or image in a way that is seamlessly executed across all media by our team."
Meanwhile, at the Wexley School for Girls in Seattle, W+K/Portland and Publicis alums Ian Cohen and Cal McAllister have formed something of a branded content machine, having pulled off hilarious longform projects for Yakima and Nike. They're now in production on a series of nonbranded shorts for Corbis, which the company will make available to various cellphone providers. "We're fortunate now because people are basically coming to us for this new branded entertainment," says McCallister. "It's not even the advertising departments that are coming to us, but the branded entertainment divisions, so I think clients themselves have been getting savvy to alternative media and different ways to reach their targets. I don't think that's new, but I don't see there are a lot of people out there specializing in this, and a lot of clients are just now seeking this out."
New York's Fertile Field
While startups have been cropping up all over the country, New York has emerged as the epicenter of the new wave. Amalgamated, Anomaly and Attik are also joined by The Brooklyn Brothers, formed by Ogilvy & Mather and JWT/N.Y. vets Callum MacGregor and Guy Barnett. The agency seemed to appear out of nowhere last winter with eye-opening work, first with a Lion-winning trailer for Jerry Seinfeld's film The Comedian, then with a pair of spots for Xenadrine that brought a surprising twist to the stale diet drug category and a sharp branding campaign for CNN.com. In February, the team welcomed two new "brothers" to the family-Paul Parton, former head of planning at DDB/N.Y., and Matt Lake, most recently business director at Element 79/New York-who bring a hefty business-side credentials to the shop's already strong creative component. Bolstered by the new additions, the shop is now capable of handling "adult"-size jobs. It recently won an ongoing branding assignment with AMC and is now actively targeting automobile clients, something the brothers had only joked about prior to Parton and Lake's arrival. There's also Powell, another design-centric shop led by former Duffy Design President/ECD Neil Powell, which gained considerable momentum resurrecting the Rheingold beer brand via events like a modern day Miss Rheingold contest and an impressive local artist-driven outdoor campaign. Meanwhile, independent shop McGarry Bowen, founded by Y&R Veterans Gordon Bowen, John McGarry, Stuart Owen and Stan Stefanski, has also shown that the old model and core values ain't exactly broke. The founders have built their ad creative-only agency on "traditional" principles of relationship building and work, and in less than three years have landed a blue-chip collection of clients like Verizon, Chase, Crayola, Reebok and Brahma beer.
The natives are not alone. The Manhattan crew shares its turf with a handful of promising immigrant shops that have demonstrated the success of streamlined models abroad. Industry eyebrows arched when Mother/N.Y. arrived, helmed by the famous Fallon Swedes, creative team Linus Karlsson and Paul Malmstrom; and biz-side bigshots Andrew Deitchman, who had global director of marketing communications strategy and business development at Red Cell and Rob DeFlorio, who for a decade had been the advertising frontman at Nike. The shop has remained deceptively quiet since its launch in late '03, but there's been considerable noise lately at its Bond Street office. A foursome at the outset, it's now home to about 30 talents, including Rob Baird and Allon Tatarka, the former Fallon/N.Y. team behind Starbucks' "Glen." They're there to handle the shop's considerable client roster: The Children's Place, Target, the NBA, Coca-Cola, LVMH and Miller's Old Milwaukee label. From the latter two Karlsson says we'll see major branding pushes in the coming year. "I think the next six months will be very, very exciting," he notes with reserved, but obvious enthusiasm. Strawberry Frog/N.Y., which opened an office in Manhattan a year ago, has been involved in a number of high-profile pitches, including the postponed Smart car launch campaign. It's continued its work with the American Heart Association's Boomer Coalition, and athletic brand Tiger, as well assignment work for Google USA, Heineken and Sara Lee. Shanghai-based Nitro, founded by maverick Australian creative Chris Clarke, recently erected a Manhattan outpost to service the much-buzzed about Mars/Twix and Dove accounts, which the agency pulled from Grey last year. Meanwhile, the highly decorated Canadian agency Taxi, which made perhaps the most dramatic leap of the bunch when founders Paul Lavoie and Jane Hope themselves moved to New York to man the U.S. operation, last month debuted its first States-created campaign for the College Sports Network and also added multihonored Cliff Freeman CD Dan Morales as a creative director.
The forward thinking of the new wave of shops naturally opens up opportunities for new revenue models. And while "new revenue models" has all the hallmarks of another ignorable '00s catchphrase, fixing the creative compensation conundrum will be one of the biggest fish the agency world will have to fry in the coming years. Perhaps the biggest activist in this regard is Anomaly, with its strategic aim at content creation and management. The shop also recently acquired rights to all of Fox's Marilyn Monroe footage, a product in itself that the agency also foresees implementing into future co-branded ventures. "What we've been trying to do with some of our solutions is make the product better, thereby making the brand better. The types of things we're doing with Marilyn and other things we're rolling out is making them the product. They are the brand. It's sort of the classic content formula. Years ago I met Bob Weinstein and he was talking about how you would brand Miramax. The joke was, you don't need to do commercials-your movies are your commercials. Every couple years somebody tries to come up with a conceptual way to advertise a movie, but the best ad for a movie is a trailer for your movie. That's the luxury of being in the content business."
Perhaps a more immediate revenue aspect of the new agencies' structures, however, is that clients theoretically can reserve their dollars for effective creative and strategic services. "When we started out, we decided there was a lot of waste in the typical ad agency revenue model," Amalgamated partner Cameron notes. "The industry on the whole has been so dumbed down that we feel that there should be a huge opportunity for a premium player. A number of the 'third wave' agencies that are starting up right now are exploiting this, hiring talented people and playing up the fact that they will actually be spending time on a client's business. Ultimately, the model should be to charge much higher rates. Amalgamated's big bet is that we will eventually be able to charge a premium for what we do, and we're beginning to charge not only for our advertising skills, but for our consulting expertise-all the intellectual property we've been developing in the area of cultural branding. It becomes a lot easier for an agency to charge for this sort of thing when you've got the likes of a former Harvard Business School professor who has just written one of the hottest business books. There's no reason why agencies shouldn't be able to recruit and charge for this sort of talent."