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Regional Agency of the Year: Modernista!

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Last September, in its first meeting with potential client TIAA-CREF, the pitch team from Modernista! made a statement even before the conversation began over lunch at a New York bistro.

"There were five guys dressed in black ... East Coast hip," recalls Steven Goldstein, evp of public affairs and marketing for the New York-based financial-services company. "I said [to myself], 'These guys are hip,' but I wondered, 'Is it all just sizzle and no steak?' "

Executives from TIAA-CREF can be forgiven their doubts. The 4-year-old Boston independent's reputation was built largely on the strength of its TV commercials for Gap, a client for whom it stopped working in early 2002. Look more closely, and Modernista! is an agency with a fondness for hip music and distinctive TV concepts, a pedigree befitting its founders: ex-Arnold copywriter Lance Jensen, known for his Volkswagen "Sunday Afternoon" spot, and art director Gary Koepke, a former creative director at hip-hop magazine Vibe who has directed music videos for the likes of David Bowie.

What could Modernista! offer TIAA-CREF in its drive to reposition itself as a broad-based, global powerhouse? It took no more than the 90-minute lunch to persuade the company's executives that there was indeed substance to the sizzle: The 45-person shop got the nod for the marketer's estimated $25 million business, beating out Omnicom Group's TBWA\Chiat\Day and WPP Group's Ogilvy & Mather, the incumbent, both New York agencies five to ten times Modernista!'s size.

"[Modernista!] just got what we're all about," says Goldstein. "We knew they were the best."

It appears he's not the only marketer with that opinion. Last year, Modernista!, which launched the Hummer H2, added an estimated $20 million in dealer work for the General Motors brand while producing eye-catching spots for its amped-up SUV. And another blue-chip client came on board after executives at Anheuser-Busch, who know Koepke from his days working on the brand at Heater Advertising, gave Modernista! a call. In September, A-B added the agency to its Budweiser roster. All told, in 2003, Modernista! nearly doubled its billings to about $120 million, posting an estimated 64 percent revenue increase to an estimated $18 million.

In the wake of losing the Gap account, Modernista! has not only survived but thrived. Backing its broad creative talents with business muscle, the shop rounded out its executive ranks by adding a president last year. As most small shops struggled in 2003, billings and revenue showed impressive gains. And the agency proved Gap was no fluke, attracting the kind of high-profile clients most regional shops can only dream about. For those reasons, Modernista! is Adweek's Regional Agency of the Year for 2003.

The shop has all the trappings of a hip, regional boutique: Its light-filled, airy loft office—in a refurbished garment factory in Boston's Chinatown—is populated by ranks of young and cool staffers in T-shirts and shirt sleeves. Music—the more obscure the tune the better—blasts out of MP3 players, boomboxes and CD players.

But unlike so many of the trendy upstarts that come and go on the strength of a single client, the agency showed it could maintain stability and creative standards even after it lost Gap, for which it had produced spots on a project basis, in March 2002. Though the work had demonstrated a level of sophistication and finesse not typically seen at a young regional shop, management changes at Gap led to the San Francisco retailer's dropping the agency in favor of New York startup Laird + Partners.

In 2001, Gap's broadcast creative assignment accounted for at least a third of the shop's revenue, and losing that business was a blow many similarly sized shops would not have managed to absorb. The Gap loss "was hard for us," allows Jensen, Modernista!'s 40-year-old CEO. "[The commercials] were a very big part of the work done by a small group of people." But in the volatile fashion world, he adds, "It was always season-to-season, so we knew it could go away."

Before the Gap account bolted, all facets of the agency had essentially been run by Modernista!'s founding partners. In some ways, the two seem an unlikely team. Chairman Koepke, 48, who has a penchant for spiky hair and black, buttoned-down shirts, is more likely to go out on the town when he leaves the office. His quieter counterpart, Jensen, inclined to the J. Crew school of fashion, heads home to the suburbs and his family. And while the collaboration works creatively, Koepke and Jensen came to realize the agency was missing an executive with a dedicated business focus.

"We needed to get our house in order," Jensen says. "We needed someone to organize, talk contracts, watch the bottom line."

That person arrived last February when Modernista! brought in 33-year-old Clift Jones, a former Bozell account-service and new-business staffer, as president. He takes some of the pressure off Jensen and Koepke, who in spite of their titles focus mainly on guiding the shop's creative output.

"[Jones] speaks a business language Gary and I are not fluent in," Jensen says. 'That's invaluable.'

Jones believes last year will prove a particularly significant one in the life of the agency, because a wider array of marketers came to the client roster. That, of course, allows Modernista! to attract creative talent of a more national caliber and to showcase a broader range of its abilities to potential clients.

For any agency, joining the A-B roster is a coup, as the brewer tends to be selective but loyal once a shop is on board. (While the lead agency on the brand remains DDB, A-B also solicits ideas from other agencies, including Goodby, Silverstein & Partners and Hill, Holliday, Connors, Cosmopulos.) The client "gives us the ability to attract the very best creative people," notes Jones. "This is the kind of assignment everybody at every agency wants to work on." Media spending on the work Modernista! is doing for A-B—which will include five to six commercials in Bud's "True" campaign, set to break in the first quarter—is estimated at $20 million.

The brewer handed Modernista! the assignment in part because of the agency's Hummer work. Last year, the shop crafted four TV spots for Hummer, each emphasizing one aspect of the brand's identity. The commercials retain Hummer's positioning line, "Like nothing else," but the spots vary markedly in mood, tone and message, underscoring the agency's breadth of creative reach.

One of the ads, "Big Race," set to the bouncy beat of The Who's "Happy Jack," features a boy who builds a wooden soapbox car in the image of a Hummer H2 for a neighborhood race. The spot speaks to the type of person who owns a Hummer, explains Jensen. "They've done things their own way: started companies, invented something," he says. "[The spot] is a neat way to humanize the truck, show it as [a tool for] someone carving his own path."

The Hummer campaign appears to be doing its job: Last year, sales through November totaled 31,447, double the units sold for the same period in 2002. Liz Vanzura, director of advertising and sales at the car maker, attributes the boost in large part to Modernista!'s advertising.

In 2003, the agency also put sneaker maker Converse back on the air after nearly a decade, touting the 96-year-old brand's heritage as the dominant shoe in basketball before the 1970s. In one of the two commercials, "Invisible," which launched in August, a basketball bounces around a deserted court, handled by an invisible player. As the faint sounds of a likewise-invisible crowd build, hip-hop narrator Mos Def proclaims: "Before new and old school. Before school had a name. There was only the ball and the soul of the game." The tagline is, "The first school."

A second spot, unveiled in November, connects new players to the old brand, introducing "the freshman class of the first school." NBA rookies such as Chris Bosh, Dwyane Wade and Troy Bell are shown making the transition from their lives as college heroes to hard-working professional players.

This year, Modernista! will show what it can do for Bud and TIAA-CREF, whose new campaign is set to break in the summer. The shop's strategy is to continue to leverage its creative product in new-business reviews. Indeed, that's the one area where Modernista! fell short last year, with TIAA-CREF the only account won in a contest. The agency came up short in pitches for Carpet One, Sprite, Sundance Channel and XM Satellite Radio, and it withdrew from the review for Virgin Mobile.

Jensen is philosophical about that performance. He notes that given Modernista!'s size relative to the agencies it went up against, the shop has nothing to be ashamed of. "Just to be in pitches against agencies we respect is sort of a win," he says. "The competition was brutal. We went up against the biggest and best agencies. A lot of times, we were outgunned."

Modernista!'s executives say they're confident that won't be the case again in 2004. "We know each other's styles now and have a lot of confidence," Jensen says. "You win accounts, you lose 'em. That's it. You can't stop trying."

BILLINGS

Up 90 percent to $120 million (est.)

REVENUE

Up 64 percent to $18 million (est.)

WIN/LOSS PITCH RATIO

1 out of 5

ACCOUNTS WON/MEDIA BUDGET

TIAA-CREF ($25 million)

General Motors' Hummer dealers ($20 million)*

Anheuser-Busch's Budweiser ($20 million)

ACCOUNTS LOST/MEDIA BUDGET

None

HIGHLIGHTS

• Joined Anheuser-Busch agency roster to work on Budweiser.

• Clift Jones, formerly of Bozell, named president.

• Lowe London's Gareth Kay brought in as planning director.