At Erich & Kallman, playful creativity is serious business

Erich & Kallman has long been known for comedic advertising, much of it absurdist and eccentric—no surprise there, given that Eric Kallman, the agency’s co-founder and chief creative officer, helped pioneer that kind of work with his iconic Skittles ads two decades ago. What that reputation obscures, though, is how rigorously brand-centric E&K’s approach to advertising is. See all of the 2024 Small Agency award winners here “Most agencies hold up a mirror to culture and try to piggyback the brand onto what’s cool and hip,” Kallman told Ad Age in a recent interview. “What we’re great at is digging into what makes a brand unique, and coming up with unique things only [it] could do. That makes for work that’s a lot more ownable and differentiating.” In other words, even when the execution is playful and offbeat—this year’s uber-slapstick Super Bowl spot for Reese’s, for instance, or the “Official Pigeon” campaign for Take 5 car washes—there’s a core brand truth that’s central to the concept. This has always been E&K’s approach, but it accelerated last September when the agency hired Andrew Speyer as chief strategy officer, after years of using freelance strategists. Speyer was drawn to E&K because of that laser focus on brand truths first. “At most agencies, the strategist is this academic cultural anthropologist who brings insights about culture no one would have thought of—and there’s value in that. But what it ignores is the value of placing the brand’s DNA at the heart of what you do,” said Speyer, who started his career at Crispin Porter + Bogusky and more recently spent time in-house at Airbnb. “Yes, of course we’re studying what’s happening out in the world—that’s the context,” he said. “But we start with what is true about the brand and use what’s happening in the world to figure out what’s useful about those things that are true.” Speyer’s arrival—formalizing, in a sense, E&K’s strategic approach—was just one development in a busy year for the agency. It grew revenue by 13% to $13.1 million in 2023 and is projecting revenue of $16.5 million for 2024. It won pitches including Gulf States Toyota (its biggest win ever) and Amazon Prime. It opened a second office beyond its San Francisco home in Austin, Texas. And it made consistently memorable work, including one of 2024’s best Super Bowl ads for Reese’s Peanut Butter Cups. For all of these accomplishments, E&K has been named Ad Age’s Small Agency of the Year for 2024. New beginnings in Texas More than any other move, opening in Austin was a seismic moment for the agency—for many reasons. The office was launched primarily to service Gulf States Toyota (GST), the nation’s second-largest Toyota independent distributor group, with 150 dealers in Arkansas, Louisiana, Mississippi, Oklahoma and Texas. E&K’s efforts for GST so far have included the regional 2024 Super Bowl spot below. More generally, though, the Austin office is a test case for how E&K expands—in terms of its offering, its talent, its culture, the tone of its creative and more. GST requires a vast amount of marketing materials—more than 600 digital assets monthly—which has led E&K to expand its digital and design departments. It’s also a bilingual advertiser, so E&K has hired more bilingual staff of its own. Bigger picture beyond GST, Austin also gives E&K a great new base for recruiting. And it offers a chance to build on the San Francisco agency’s culture, while also creating something new. Finally, in the work itself, the Austin outpost allows E&K to continue to experiment tonally beyond humor. “As far back as 2020, we talked about an Austin office,” said Jill Garrison, E&K’s chief operating officer, who led the office opening. “[Doing it now] lets us be local to our new client. But it also gives us a great recruiting base—not only local talent but talent across the country who are excited about being in an office and potentially relocating to the Austin area.” E&K works in person from Tuesday to Thursday, and the Austin office added 14 new hires in June alone. See all of the 2024 Small Agency award winners here “We were already doing a lot of digital work, but we really had to expand that. And we’ve done Hispanic work, but never had a whole group of people on staff—now we do,” said Steve Erich, E&K’s co-founder and president (and another CP+B veteran). “It’s been great because there’s so much needed on that piece of business, and now we’re bringing it to other pieces of business as well.” More than a comedy shop There’s no question E&K excels at humor. But the agency always saw Kallman’s knack for comedy as a double-edged sword—it opens doors, but can also leave the agency typecast. The shop has been moving past the comedy label lately, though. GST, now E&K’s largest account, isn’t humor-driven. Nor is Amazon Prime, which hired E&K last year to advertise its “Thursday Night Football” broadcasts. For the Amazon campaign, E&K dreamed up a boiler room under an NFL stadium, where Marshawn Lynch and Prime’s on-air announcers “turned on” the action each week using a giant control panel—pushing a lever and seeing the machine whir to life with football content. The boiler-room idea was a fresh way of injecting narrative into the standard highlight footage. It also allowed the agency to shoot four months’ worth of content in two days. “We had 15 matchups over 15 weeks, so we had to create a modular system where it’s not just hard cut to another highlight,” said Rikesh Lal, executive creative director. “We wanted to create some value in terms of branding for Amazon as well, because [TNF] was a big thing for them.” The campaign helped lead to a 24% increase in total viewers over the previous season, as well as double-digit gains with the 18-to-34-year-old demographic, according to the agency. Yet humor still reigns This isn’t to discount E&K’s comedy chops—far from it. The agency still makes some of the funniest advertising in the business, and did so recently on the biggest stage: Its Reese’s spot was one of just seven ads to earn five stars in Ad Age’s Super Bowl 2024 ad review. The spot is very wacky, though again, heavily brand-focused. In a broadcast overrun by celebrities with tenuous connections to the products they were pitching, the Reese’s spot was celeb-free and included repeated product shots on Reese’s familiar orange background—in between scenes of people in a living room alternately ecstatic and dejected by news about caramel Peanut Butter Cups. “Everyone just gets a celebrity and gives them a bad joke to say. But that takes you away from the brand,” said Kallman. “Reese’s is always on an orange background, delicious food footage as you’re hearing Will Arnett’s voice. So that’s where we started. Then it was about going as over the top as possible when we’re seeing those people’s reactions.” “We had maybe 50 scripts in the running, but you have this core product with the peanut butter cup,” added Lal. “Playing with people’s emotions on how they feel about that cup felt really right. We placed a pretty big bet, and it paid off.” Sales of Reese’s Peanut Butter Cups spiked 70% immediately following the game, the agency said. “Part of being a great advertiser is delivering the brand. It sounds simple and fundamental, but it can get lost in a desire to break through or stand out,” said Ryan Riess, VP of brand strategy and creative development at Reese’s parent Hershey Co. “With the Super Bowl, E&K really delivered content that our Reese’s fans would want to see. ... They are masters at making your brand the star while entertaining the audience.” Riess also praised E&K’s prolific nature and the consistent creativity of the many ideas it brings to the table. The range of ideas “can go from straightforward and easily digestible to much more esoteric,” Riess added. “All creative will be on brief, but how the insights are translated is quite different. ... They know there are several different ways to crack any brief, which means they aren’t hard-selling anything.” E&K’s recent Take 5 campaign was also humor-driven, as the brand promised free car washes to vehicles that were pooped on by its “Official Pigeon”—a random bird to which the agency attached a tracker and then followed around Dallas. “That started with some simple work we did before that—some outdoor boards, where one of the headlines was, ‘Birds hate us,’” said Erich. “That’s an insight—not about consumers but about the business. And it blossomed into the Official Pigeon.” “Official Pigeon” was an example of working with a small budget (just $20,000 to start) and doubling down when the campaign caught fire. “The client loved that idea so much, they were like, you know what, we’re going to put media against this now,” said Lal. They ended up adding radio spots and signage at stadiums. “We ended up with like a budget that was five times more than what we initially accounted for. It just kind of metastasized, in a good way.” Take 5 markets that ran the campaign saw 7% more revenue lift than markets that did not, per E&K. See all of the 2024 Small Agency award winners here Take 5 is a good example, too, of E&K’s approach to production, which is to welcome all ideas, whatever the budget. “Whether it’s a big 360 campaign in four weeks like Impossible [Foods] or a different campaign shoehorned into an unideal budget, we can support any Rubik’s Cube version of an idea you might have,” said Kati Haberstock, executive director of production operations. “We’re unsiloed, so we can adapt and adjust. That’s the beauty of being small—everybody’s in the ring, making it happen.” Pressure testing ideas At E&K, ideation is just as client-focused as execution. This means being fast as well as comprehensive in the concept phase, to give the client more options rather than fewer—which the agency said builds trust. “I’ve always been prolific. I won’t tell you I’m the best, but I am good at coming up with a lot of ideas quickly,” said Kallman. “We show a lot of work to our clients. You have to be brave enough to show them work you’re most excited about but also work that’s still good but you’re not as excited about—so you can take them on that ride. That not only leads to better work, but it leaves the client relationship better.” “When I give them an assignment, they present a lot of work in round one, which is incredibly helpful,” said Hershey’s Riess. “The range of work allows for the [client] team to really home in on what elements of the creative strategy are most impactful once creative brings it to life.” “You get through the bad ideas and get to the better stuff faster,” added Lal. “Also, we don’t go into a room with one idea we think is infallible. In a final pitch or presentation, there’s a lot of inputs we don’t have on the client side. Once we have those inputs, then we know exactly where we need to go.” Other recent E&K campaigns where this process led to an ownable idea include Jolly Rancher’s use of a jolly rancher character (a first for the brand, surprisingly); iRobot’s Roomba spots personifying the vacuum’s software (a differentiator in the category); Impossible Foods’ anthem about eating more meat (just of the plant-based variety); and Meineke’s ads with the eager German spokesman who uses the phrase “meine key” as a mnemonic to get viewers to remember the brand. Talent at the core Critical to all these successes, the agency added, is a happy and engaged workforce internally, thanks to employee perks and career opportunities that go beyond industry standards. E&K covers all premiums for medical, dental and vision coverage, as well as public transportation, gym memberships and any creativity-related education outside of the office. Employees are also given six weeks per year to work remotely from anywhere (beyond every Monday and Friday also being remote). The agency said it budgets more than 10% above the industry norm for employee salaries. “Employees have always been at the center,” said Garrison. “We always talk about talent being the core of any great agency, and part of seeking and recruiting great talent is treating them in a great way.” “Aside from the perks and benefits, everyone has a career plan to focus on and knows we support their career development too,” said Kaitlin Conroy, E&K’s HR director. “We make sure that when every employee starts, they’re properly onboarded. And every employee that’s eligible is reviewed every year, which I think is super important.” E&K has also expanded its commitment to diversity and inclusion each year. HR ensures the agency meets a threshold of diverse candidates for each open position. E&K continues to work with the BLAC internship program, focused on bringing more Black creatives into the industry. And in production, the agency includes mandatory diversity reporting in its bid specs and has begun implementing “Double the Line” practices, an AICP initiative designed to ensure access for underrepresented groups in production. See all of the 2024 Small Agency award winners here Overall, E&K is 57% female and 44% diverse. All of the agency’s creative directors (aside from Kallman) are diverse or a member of the LGBTQ+ community. “We’ve really built an agency of opportunity,” Garrison said. “People, from the most junior to the most senior, can come here and really build a career. We identify people who are highly entrepreneurial, who want to go that extra mile. And they’ve really grown and blossomed—many have been here for years and years.” “This is the thing I might be most proud of,” said Kallman. “The average stay for a midlevel person [in the industry] is two or three years. Our people stay five, six, seven years—and we’re only eight years old as an agency. We do great work, I think, but I’m also just super proud of how we treat people.” Keep on keeping on As E&K has found a formula that works—steady growth, award-winning work, happy employees, new horizons—it’s not surprising its leaders have little interest in major shakeups. Indeed, the agency’s stability—and its goal of doing more of the same—speaks to its effectiveness both internally and with clients. “You identified this as a breakout year for us, but we don’t see it as a leap. We see it as a progression,” said Erich. “We want to continue to grow the brands that we’re working on and grow the business overall. We don’t want to get to a place where we’re not working on the business and just managing things. We’re all doers. We love what we do, and we want to keep doing it.” “We’re in some more pitches,” added Kallman. “We’re getting some opportunities already for the Super Bowl next year. I just want to keep having fun. I don’t think it’s any more complicated than that.”

At Erich & Kallman, playful creativity is serious business

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