NEW YORK Nitro's acquisition of AKA Advertising last week had more than a few observers wondering what Chris Clarke is up to.
The enigmatic Nitro CEO is known for thinking big: He's pried brands away from the global roster shops of some of the world's largest marketers, companies like Masterfoods, Unilever, Coca-Cola, ConAgra and Nike. So what's the appeal of a tiny, little-known Manhattan shop dominated by Foot Locker?
Effectively, he is buying AKA's scale, some 70 people for "their executional excellence and production," Clarke told Adweek in an exclusive interview. "I bought them for the back-end production resources." AKA will be folded into Nitro, with its founders, Arie Kovant and Stan Schwarz, staying on board for now.
Nitro, which opened in New York in 2004 and has about 35 employees here, will move from its lower Manhattan offices into AKA's Park Avenue South space, which formerly housed Deutsch. Clarke is revving up his New York operations. He said he is close to acquiring a digital agency to fold into Nitro, and within the next month expects to sign a "heavyweight" ecd, a well-known name around town. (Clarke has been acting in that capacity.) AKA may seem like an unlikely expansion move for the ambitious 38-year-old, but then again there is little about him that conforms to industry convention.
In a reverse twist, Clarke started his agency in Shanghai in 2002 and expanded into the West, with an office opening in London in 2004. He's a documentary filmmaker who's never worked a day in an agency other than his own, and yet he's cold-called his way into some of the industry's most impenetrable marketers. While still in his 20s, he created Australia's largest independent agency network, Pure Creative, which he sold to D'Arcy in 1999. He formed Nitro, and while it is considered a boutique, it functions more as a business consultancy than a creative darling. Clarke doesn't see his competitors as Crispin Porter + Bogusky or the large international networks his clients use. His competition, he said, are companies like "FutureBrand if they did TV; McKinsey if they created advertising. ... If you look at people like David Ogilvy or Leo Burnett, they were a complete partner to marketers early in the product development process, which at stage 10 happened to involve advertising. The industry stopped being that kind of creative business and we became executors of advertising communications."
He described the current state of the agency business as "unhealthy," saying industry players have been devalued into "commoditized bottom feeders." An exec at one of those agencies returned the favor, saying about Clarke: "He's an aggressive new-business predator who will go to any length to win a piece of business." But even Clarke's detractors admit he possesses a charisma that appeals to clients, and he claimed Nitro has yet to be fired by a marketer.
Clarke broke into the industry after directing a Mars commercial for which he didn't like the script, convincing the client he could do better. Mars was Pure Creative's first client when it opened in 1993, and the agency would also work for Procter & Gamble, Coca-Cola, Bristol-Myers Squibb and the Australian Tourism Board.
The agency became associated with innovative solutions: In 1997, Clarke got an Australian Rules Football star player, Gary Hocking, to legally change his name for a short period to "Whiskas," client Mars' cat-food brand. Every time the game announcers mentioned the player, they had to refer to him by his feline moniker, which also appeared on his jersey and in media coverage.
He's worked in China since 1994 and was prescient in his belief that future global network alliances would be won or lost there. Indeed, global marketers like Unilever and Mars have broken alignment with roster networks McCann and BBDO to give local business to Nitro. (Nitro also works on McCann client Coke.) "Nitro is continuing to get scale and will now appear as the alternate choice on global clients' radar, not just regional or local ones," said Greg Paull, the Beijing-based industry consultant at R3. (It is believed he has been approached to sell by holding companies, but Clarke said, "We're committed to remaining an independent.")
In London, Nitro acquired Soul, a start-up founded by ex-Bartle Bogle Hegarty creatives, who subsequently left. In 2005, Clarke acquired a below-the-line shop, River Communications, and, last year, digital shop Mook. The London office works in the U.K. and Europe for Unilever, Nike, Coca-Cola's Powerade, Drambuie and the Royal Bank of Scotland.
Nitro's London office is partnered with Arnold in the final rounds of the current Volvo pitch; should they win, Nitro will service the business outside the U.S.
With the AKA acquisition, Clarke appears to be expanding his New York footprint in a similar fashion to his approach in London. While handling Mars' Twix brand was part of the impetus for opening in Manhattan, Clarke has added other significant accounts including ConAgra brands like Healthy Choice and Hebrew National. Clarke said ConAgra now rings up "over $100 million" of business at Nitro. ConAgra did not return calls.
Clarke declined to discuss Foot Locker, other than to say he wouldn't have bought AKA if the account were shaky. Key execs on the business are contractually bound to stay with Nitro. A Foot Locker rep didn't return calls.
Even Clarke's fans said he could be a control freak, a trait he may have to relinquish if he is to fulfill his ambitions of a global network. Nitro, which also has offices in Melbourne, Sydney, Dubai, Hong Kong and Taipei, Taiwan, plans to open in Russia and Brazil this year. (He hopes to open in India next year.) Clarke said he's attracting the talent he needs to delegate: Chris Nurko, the ex-global head of innovation for FutureBrand who is deputy global CEO at Nitro; Paul Shearer, global ecd, former head of Wieden + Kennedy, Amsterdam, who is known for his Nike work; and Stephen Marrs, global president, digital entertainment, who was co-founder of Tribal DDB.
"I was a micromanager [at Pure Creative]," Clarke conceded. "But now I set the direction and get [Nitro's] teams to work on the details."