The fate of Mad Dogs & Englishmen may not yet be sealed, but the future of the creative boutique model it helped define just might be.
After thriving through the dot-com boom, then surviving on the low-carb craze, Mad Dogs is on the brink of shutting down [Adweek, May 2]. Drastic cuts in spending by Atkins Nutritionals—which spent $30 million last year but has yet to develop a 2005 budget—exposed a shop that was well-tailored for the splashy dot-com era but unable to keep pace when clients began demanding integrated solutions beyond traditional ads and nascent guerilla campaigns.
"Back when everything started for us, the media mix was pretty simple," said Nick Cohen, who founded the agency in 1991 with fellow managing partner Robin Hafitz. "There was TV, print and a bit of outdoor. Boutiques were, in a lot of ways, just as well-equipped as any agency team." But today, Cohen admitted, the traditional notion of boutiques represents "a genre that I've come to think is irrelevant."
Even as Mad Dogs looks likely to make its exit, a new kind of small, creatively driven shop is taking hold, as shops like Mother, StrawberryFrog and Anomaly gain attention from major clients.
The old idea of a boutique has become shorthand for "small agencies that work on small brands," said Ernest Lupinacci, a partner at 25-person Anomaly in New York. But the difference between the new boutiques and their predecessors is breadth of services. Lupinacci said Anomaly's principals represent disciplines in demand today—not only creative execution, but design, media planning, online and viral. The media landscape is changing so quickly that, "if we had done this a year earlier, it would have been a mistake," he said. "I don't think people would've gotten it."
Mad Dogs built its early reputation with traditional advertising, creating quirky TV and print campaigns for clients such as TV Land, Yoo-hoo and Moviefone. In 1993, Richard Kirshenbaum and Jon Bond purchased a 50 percent stake because they were constantly referring clients to the shop, Kirshenbaum said.
At its height in 1999, Mad Dogs claimed $125 million in billings from more than a dozen accounts and employed a staff of 75. In 2000, the partners bought out Kirshenbaum and Bond, and opened a San Francisco office.
But from April to July 2001, Mad Dogs lost 90 percent of its business. The agency resisted cutting staff, and a lack of revenue hampered its ability to expand into the online, viral and media planning services that clients wanted. Cohen said he resisted partnering with other shops because he felt it would be detrimental to Mad Dogs' culture. "It was employee friendly, but it was built for the industry—not to be a commercial success," said Bond.
The shop survived because Atkins' spending nearly doubled every year, said Cohen. But with all of its eggs in Atkins' basket, the shop failed to develop the disciplines that would woo other clients.
The latest crop of "boutiques" take creative beyond traditional advertising. Anomaly counts Coca-Cola's $20 million Dasani among its clients, working not only on TV but also package design and the Web site. StrawberryFrog, also a 25-person shop in New York, has been invited to pitches for Almay, Jaguar and Smart Car. Both shops use freelancers and other outside resources extensively.
At Mad Dogs, 15 employees remain, the San Francisco office has been closed and it's trying to unload the lease to its Park Avenue offices in New York. While Hafitz holds a glimmer of hope that the shop will not shut down entirely, she did say it would shrink.