Agency.com Seeks to Right Its Ship

NEW YORK Two years ago, a video appeared on YouTube that had far-reaching consequences for one shop. The video, made by Agency.com as part of a pitch for the Subway account, quickly became a nightmare. What might have been in a different era an experiment gone awry and never given a second thought turned into fresh meat for ad blogs, with commenters ripping into the shop for making the video.

To be sure, the video was goofy and probably, in retrospect, ill-advised. Agency.com did its best to make lemonade, playing along with the jokes about the fist-bumps and declaration it “rolls big.”

Still, the misfire was symbolic of an agency that had lost its way. A pioneering interactive shop founded in 1995, Agency.com was in the midst of leadership turmoil and an identity crisis. The shop’s new CEO at the time, David Eastman, was shown the door nine months later. Chan Suh, a founder of Agency.com, returned to run the shop and stemmed an exodus of talent and accounts.

Slowly but surely, Suh has been able to steady Agency.com since then, if not make it thrive. While few would tag it as a hot shop, it has rebuilt its management ranks with respected hires while quietly building a roster of impressive brands and solid creative work. A sign of how much the shop has changed: of the few staffers in the video, just two remain at the agency. Still, both insiders and outsiders believe there is much work to do.

“2007 was the bottom of the trough,” said Suh. “We had a lot of work to do. I knew we had big challenges in reality and perception. People outside of the company weren’t thinking of us in great terms. One challenge was our perception of ourselves, what we do and who we are.”

Indeed, Agency.com went through an undeniable rough patch, which some staffers trace directly to the doomed pitch video. In addition to rapid staff turnover, the shop was caught in the midst of an identity crisis: What was its sweet spot? Banners and microsites? Digital ideas that can extend offline? A creative boutique?

Beyond that, Agency.com was the subject of repeated talk that it would be combined with another Omnicom Group Web shop or folded into TBWA, which it was aligned with in an Omnicom plan in 2006. Sources said the possibility was considered, particularly as Agency.com’s business cratered. Suh, however, was adamant the shop would remain independent and chart its own course.

“It’s promising to see the bleeding stop,” said Colleen DeCourcy, chief digital officer at TBWA. “People aren’t fleeing and they’re bringing to the market what the market wants.”

There are hopeful signs. Agency.com recently won the digital marketing account for NikeStore.com and NikeID, beating out shops like AKQA, Avenue A/Razorfish and Organic, according to sources. The assignment follows last year’s win of TBWA\Media Arts Lab client Apple’s iTunes marketing and expansions of its work with Mars brands, per sources.

“It’s been very step by step,” said Mat Zucker, ecd of Agency.com in New York. “With that comes the confidence.”

Agency.com has overhauled its management in the past two years. Suh arrived after the tumultuous tenure of Eastman, who came over from Agency.com London to run the agency following the contentious departure of Don Scales in March 2006. Eastman concentrated on expanding the shop abroad and working closer with TBWA. Scales took several executives with him to his new position at iCrossing, and Agency.com lost its San Francisco and New York office heads in late 2006. Eastman was unable to steady the agency, eventually vacating the CEO job to Suh after just over a year in charge.

Since then, Agency.com has enjoyed a period of relative leadership stability. Zucker arrived shortly before Eastman’s departure. Scott Briskman moved from New York to be the San Francisco ecd. Jordan Warren, a digital veteran who was running his own integrated marketing shop, took over management of that office in May 2007. Riccardo Zane joined from OgilvyOne a month later to serve as president of Agency.com New York.

Suh also focused the shop’s domestic activities on New York, San Francisco and Chicago, closing its Dallas office and putting a halt to international expansion. “We wanted to make sure the core agency was in shape,” he said. “We’re doing so much better than we have in a long time in the U.S.”

Simply having stable management has helped the agency immensely, said Briskman. “We’re getting the ship right,” he said. “It was going in different directions and there were people coming in and out at the top layers.”

Yet to some inside the agency, it isn’t all that clear what direction Agency.com is going. While executives talk of focusing on digital marketing, Agency.com is serving as the lead agency for LG Electronics, producing everything from TV to print. While the work is a nice challenge, Suh suggests Agency.com’s future lays less in trying to secure through-the-line work but in sticking to its knitting.

“I want us to be digital specialists and working with clients that have large brand ambitions,” he said.

In the past, he acknowledged, Agency.com spread itself too thin. “We were taking on stuff we shouldn’t have,” he said. “There were projects that would have been better for a partner to do like large-scale systems work and lower-priced production work. I know we really needed the money, but this isn’t what we were good at.”

Now, Zucker and Briskman see the agency’s work solidifying. From New York, Agency.com recently launched a new Web campaign for Skittles that invited users to “mix the rainbow” with beatbox artist Kenny Mohammed. It went beyond the microsite by creating an application for Facebook that lets users embed mixes on their profile pages.

In San Francisco, the shop has parlayed its work on dynamic banners for eBay into the Nike assignment. The eBay work is what Warren calls “brand-led e-commerce marketing.” Agency.com has taken feeds from eBay’s millions of products and matched up prior user site behavior to dynamically created banners showcasing live auctions

The challenge for Agency.com is that it is, in many ways, a “traditional” interactive agency, according to current and former staffers, lagging behind more innovative work done at smaller shops like Big Spaceship and Deep Focus. One source calls it “a 1.0 agency,” still churning out banner ads and expensive microsites, in a 2.0 world of distributed content and low-cost social media.

“I think things have changed so significantly in the past few years and they are all going to struggle to catch up,” said a source. “But then again, maybe a lot of brands are just as behind.”