Tuesday, November 08, 2005

What happens when a brat gets fat?

November 7, 2005
Advertising
Will Size Spoil a Cheeky Ad Agency?

By JULIE BOSMAN

MIAMI - Alex Bogusky, the 42-year-old creative director of the advertising agency Crispin Porter & Bogusky, is somewhat beleaguered. Sitting in his cluttered office here, surrounded by masks he created for Burger King and other memorabilia from years of ad-making, he recalled a "battle of the bands" at Advertising Week in New York a few weeks earlier. Agencies had pitted their in-house rock bands against each other, and the Crispin band had not been treated well.

"People were cursing and throwing beer at us," Mr. Bogusky said. "It's bumming me out. It makes me want to get out of the business."

A Crispin spokeswoman later clarified that there was "only one lone angry guy." But a touch of hyperbole from Mr. Bogusky may be understandable. After all, Crispin Porter & Bogusky has enjoyed an extraordinary hot streak. Its work is both weird and successful, from Burger King's Internet spoof centered on a subservient man in a chicken suit, to an anti-tobacco campaign showing body bags stacked in front of Philip Morris headquarters in Manhattan.

Crispin, unlike many other agencies, has managed to navigate striking changes in how consumers are using media, and viewing advertising. It often shuns traditional commercials and exploits what is called viral marketing, encouraging consumers to spread marketing messages to each other. This approach is gaining attention in an industry coping with the decline of the 30-second commercial and the movement of ad dollars to the Internet.

Rivals are watching closely to see how long this hotshot agency can keep its streak going - and if the Crispin approach that worked so well with smaller, more daring clients can also work with bigger accounts. In the last few years, Crispin has tripled in size to more than 300 employees, equivalent to a midsize Madison Avenue firm. Accounts have gotten bigger and more prestigious - to include Mini, Virgin Atlantic, Burger King and Sprite.

In September, Crispin had its biggest coup to date, landing Volkswagen - an account valued in excess of $350 million. Since 1997, billing has risen to more than $750 million from $40 million.

Crispin isn't the only agency doing innovative work. Boutique agencies from Anomaly to StrawberryFrog to Mother are taking on bigger clients like Coca-Cola and Old Navy. But making the leap from creative upstart to industry powerhouse is tricky - and along the way, many young agencies have cooled off, failed or been swallowed up by larger ones.

Creative shops like Deutsch Inc. of New York have lost steam. A 1990's upstart, Mad Dogs and Englishmen, shut down this spring, while Fallon Worldwide announced in July that it would close its New York office.

Some skeptics see Crispin and like-minded agencies as a temporary blip. "The big agencies are saying that being big doesn't mean you can't be creative, and they're going to prove it," said Leslie Winthrop, chief executive at AAR Partners in New York.

So how nervous are Madison Avenue agencies about the Crispin model?

"Not nervous enough," said Richard Roth, the president of the agency search firm Roth Associates.

Crispin executives remain confident, and maintain that their competitors have plenty to fear. "It's hard for firms to transform themselves," Chuck Porter, Crispin's chairman, said of the big agencies. "But they'll either adapt or die."

The key to Crispin's model is being able to adapt quickly to a client's requirements. Volkswagen has suffered from slumping sales for years and needs a sharp turnaround in a crowded American car market.

"It's a big bite to take, both creatively and administratively," Mr. Roth said. "It's very difficult to take on a huge account if you haven't done it before, and just because of the complexities of the account. It's a grizzly bear, not a panda. Mini was a panda." Crispin gave up the Mini account when it was hired by Volkswagen.

And Mr. Porter said: "Having gotten Volkswagen really changed the agency. It made it much less likely that we'll ever get small again."

Crispin moved into new headquarters two years ago, transforming an empty Cineplex into a hip office for more than 300 people. It looks like a factory, complete with corrugated steel walls and cement floors. Employees' median age is 31, and its creative team - habitually clad in jeans and sneakers - looks even younger.

The agency was founded in 1965 by Sam Crispin, and did not appear on the industry radar until the mid-1990's. Mr. Porter, a transplanted Minnesotan who came to Miami 35 years ago, was recruited to transform the agency into a creative-driven shop in 1987 and recruited Mr. Bogusky as creative director in 1989. Jeffrey Steinhour joined in 1992 as an account executive but is now a partner, and Jeff Hicks, the president and chief executive, was hired in 1997.

Around that time - with the Internet boom, teleconferencing and other new technology - it became clear to Crispin executives that they did not need offices in New York and Chicago to be a national player.

"We were the third-best agency in Miami," said Mr. Hicks, a Harvard Business School graduate and former Leo Burnett executive. "We were a very successful regional agency, doing advertising for local Mercedes dealers. But we wanted to stay in Miami and be a national agency."

It was the Truth campaign, an 18-month, $60 million antismoking initiative sponsored by the Florida Department of Health, that made Crispin the little agency that could. It created a series of irreverent television spots that unsold tobacco by exposing tactics that tobacco companies use to attract young smokers. (One showed a fake awards show in hell for tobacco executives, with awards like the Greatest Number of Deaths in a Single Year handed out.)

The next year, Crispin won the nationwide anti-tobacco advertising campaign, a prestigious account, and the agency's work was lauded after teenage smoking rates dropped.

Andrew Keller, a vice president and creative director, said the work on the account demonstrated that one of the agency's objectives was possible - using advertising to alter conventional wisdom, in this case, that the only way to counteract smoking was to focus on immediate health risks.

That was Crispin's creative turning point, Mr. Bogusky said. "The only way to be successful was to change teen culture around smoking. That began our thinking that culture wants to change. Then it affected our thinking on Mini."

In 2001, MDC Partners of Toronto, which owns a group of creative agencies - including Kirshenbaum Bond & Partners and Margeotes Fertitta & Partners - bought a 49 percent stake in Crispin for more than $20 million in cash and stock. Selling a stake was a way for Crispin to expand beyond Miami and add to its staff of 105. The partners also wanted to aggressively expand the firm's interactive services and improve its Web design capability.

For Miles Nadal, the chief executive of MDC, the timing was impeccable. "Partnering with Crispin has been like winning the lottery," he said, although he also said that he could not measure the current value of his investment. "They wanted to have the resources to expand their business without compromising their integrity," Mr. Nadal added.

But the MDC deal has produced one of Crispin's biggest setbacks as well. After it was concluded, the partners decided to expand their creative arm by opening an office in Los Angeles. The new office failed.

"It was very difficult for us to replicate the culture," Mr. Porter said. "Ultimately, we decided it wasn't worth it. If we had to do it over again, Alex or I would have had to go there." (The office is still open for regional media buying, but only employs 10 people.)

Last year, Crispin took on what was called the worst account in advertising, Burger King. In the year before Crispin took over the account, the fast-food giant had spent $300 million on advertising, yet the company had slumping sales, even as competitors like McDonald's were doing well. Crispin doubled its size and became the target of industry naysayers, who predicted that the agency could not use its creative sense with such a big account. (Donny Deutsch told The Wall Street Journal that he wouldn't even take Burger King's call.)

The campaign began with www.subservientchicken.com, which had a mock Webcam trained on a figure in a chicken suit who took commands from users. The day the site went online, nearly 200,000 people logged on. Since its beginning, more than 16 million people have viewed it.

The firm also created a king character to star in television spots and merchandise. The King, as he is called around the agency, is in part a likeness of Bob Cianfrone, one of Crispin's creative executives. "Your name's Burger King and you have no king?" Mr. Bogusky said, recalling the early days of the campaign. "It just seemed obvious."

The television commercials starring the King used what Mr. Bogusky calls horror techniques (the King silently popping up in someone's apartment), and are sometimes infused with a hint of mock eroticism, like in a spot where a man wakes up with the King beside him in bed.

"I didn't think it was going to be anything and then it just blew up," said Rob Reilly, co-creative director on the Burger King account. "I think people are expecting cool things from Burger King now."

More important, Crispin had proved many of its detractors wrong. "Our success with Burger King proved there wasn't a problem with the client, but there was a problem with the ad agency," Mr. Keller said. Burger King had used five lead ad agencies since 2000. But Burger King's franchisees have recently turned against the Crispin-designed campaign after sales slipped over the last few months, according to the trade publication Advertising Age.

Crispin's work for Coke Zero has also faced recent scrutiny - critics said the initial round of television commercials, which featured the rapper G. Love performing "I'd Like to Teach the World to Chill" on a rooftop in Philadelphia, did not describe what the new drink was. (For the record, it's meant to taste more like regular Coke than Diet Coke does.) Coke Zero was also falling short of sales expectations of a 1.5 percent share, according to a report by Bill Pecoriello, a Morgan Stanley analyst.

Keeping the firm's own culture intact while expanding has been a constant challenge, Mr. Steinhour said. Headhunters often poach Crispin employees, sometimes even parking outside the office to catch people leaving work. The Volkswagen account will require still more hiring. All the growth brings up the question that Jay Chiat once asked of his own agency: How big can we get before we get bad?

"The people who really believe in the soul of this place wince when they hear we're hiring more people," Mr. Steinhour said. "But we consider C.P.B. our biggest and most important client."

Changing constantly is the way to stay relevant, Mr. Bogusky said. "Every year, we've evolved," he said. "As soon as you begin to believe 'we are famous for X,' you begin to die."

Copyright 2005 The New York Times Company

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