Adweek Agency of the Decade: Droga5

Heading into 2010, the biggest question about Droga5 was whether the startup agency could maintain its momentum without sacrificing the obsessive creative spirit that made it such a phenomenon. On the eve of 2020, one could argue the same question hovers over the agency—though it's by no means a startup any longer. The New York-based creative shop that began the decade with 80 staffers packed into a space that "felt like a student dorm," according to founder David Droga, is ending the 2010s as a 500-staff powerhouse with increasingly global ambitions that are likely to be fulfilled thanks to its recent acquisition by Accenture Interactive. No agency has dominated the discussion around creative advertising more often in the 2010s than Droga5, which was a three-time winner of Adweek's U.S. Agency of the Year and was crowned Cannes Lions Independent Agency of the Year for 2015, 2016 and 2017. Droga5 was only 4 years old when the decade began, but it rapidly grew into one of the industry's most high-profile players, expanding its annual revenue from $14 million to $200 million over the past 10 years (averaging more than 30% growth per year) and producing several of the best ad campaigns in modern marketing. Now, in recognition of its consistent creative excellence and skillful evolution in the face of industry uncertainties, Droga5 has been named Adweek's Agency of the Decade. [kickout id="1"] [article_summary section="1"]'The dual lenses of strategy and creativity' While Droga5 is often honored within its own industry—David Droga notably received the Cannes Lions' lifetime achievement award, the Lion of St. Mark, when he was just 49 years old in 2017—what's more telling is the praise and appreciation it receives from its clients. Jill Baskin, CMO of The Hershey Company, is a three-time client of Droga5, having worked with the agency during her time with Athenos, Honey Maid and now on the Twizzlers account. "Droga5 is the kind of partner every brand needs on its side," Baskin said. "Each time, they surprise me with their creative ideas while completely nailing the strategy. That is what makes them special, their ability to deliver topical, relevant creative that is founded on exceptionally strong strategic thinking." [kickout id="2"] Droga5 might be best known for its dramatic, hilarious or even confounding creative (think IHOb, a laughably bizarre name change that quadrupled burger sales at IHOP), but it's the agency's eye for strategic campaign underpinnings that clients most often praise. "Droga approaches every project with the dual lenses of strategy and creativity," said David Rubin, CMO of Droga5 client The New York Times. "They blend the two disciplines, which is really hard to do. What is The Times' brand and business objective, and how do we accomplish that objective in a way that both fits the brand and will break through with people emotionally? That ability to marry the functional objective and emotional resonance is hugely valuable." Perhaps counterintuitively, the secret to Droga5's consistency might just be how it embraces constant change. Unlike many of the agency's senior leaders who've been with Droga5 since its earliest days, David Kolbusz joined the shop halfway through the decade, becoming creative chief of its London office—currently Droga5's only extension outside New York. As both an outsider and an employee, he's been impressed by the agency's ongoing strategic evolution as media and marketing underwent constant disruption. "It was the first agency not just to predict but also to adapt to the rapidly changing communications landscape that we found ourselves in after the internet exploded," Kolbusz said. "It's been 10 different agencies in 10 years." For David Droga, the key factors that have enabled Droga5 to adapt incessantly without sewing internal chaos are camaraderie and craft. "Our culture is defined by how we treat our people and the quality of the work we put out," Droga said. [kickout id="4"] Embracing growth from Day 1 From its earliest days, Droga5 has never been shy or averse when it comes to growth. Many small agencies are launched by veterans of massive corporate networks, and they're understandably wary of seeing their passion projects become bloated sellouts. But Droga also came up through the big-agency machine, from which he gained an appreciation for the creative potential of global organizations. An Australian native who was already an agency partner at age 22, Droga exploded up the ranks of the Saatchi & Saatchi network and landed as its U.K. executive creative director in the early 2000s. On naming Saatchi & Saatchi the Global Agency of the Year for 2002, Adweek described Droga as "one of the hottest creative directors in the world." After Saatchi parent company Publicis brought Droga to New York in 2003 to be its first worldwide creative chief, he began crafting the plan for his own independent agency, which he officially launched in 2006. The newly christened Droga5—named for the label put on young David Droga's clothing by his mother to mark it as belonging to the fifth of her six children—was ambitious from the start and quickly worked to carve out a reputation as a top-tier creative shop. Droga felt his agency had limitless potential for growth, and he embraced it. "I've always wanted to prove our worth, and having more canvases and more impact, that comes with scale. I never wanted us to be pigeonholed and precious," Droga said. "We didn't inherit any place. We were building it from the ground up." The road from 'second agency' to AOR In 2010, Droga5 already had a strong reputation, especially for digitally innovative and culturally relevant campaigns such as Mark Ecko's 2006 "Still Free" viral stunt that faked spray painting graffiti on Air Force One and 2008's "The Great Schlep" in support of Barack Obama's presidential campaign. What it didn't have was a secure client roster. Droga5 was the digital agency or experiential agency for several respectable brands, but creative agency-of-record wins had proven elusive. It was the "second agency" for most clients, recalls global CEO Sarah Thompson, who had joined Droga5 in 2008 as general manager and quickly rose to the level of president and then CEO. "We hadn't really owned something in a more traditional space," Thompson said. "And the big question then was, could we really do things differently and do work at the same caliber as we had with smaller projects?" As the decade began, Thompson said, she was simultaneously "excited, optimistic and petrified" about Droga5's future. By 2012, though, everything was coming together. Droga5 racked up a stellar spree of new business wins, adding clients like Coke Zero, Smartwater, Mondelez’s Honey Maid, the Bill and Melinda Gates Foundation and Newcastle Brown Ale. That year, it was honored for the first time as Adweek's U.S. Agency of the Year. "Major brands and really strong marketers were hungry for what we did back then and continue to do," Thompson said. "They were really looking for agency partners who can do everything. It wasn't just activations versus digital." Those wins would come to fruition in 2014, when Droga5 created several of its most fascinating campaigns, including Newcastle's star-studded and delightfully meta "If We Made It" campaign about a Super Bowl campaign that never aired in the Super Bowl. For Honey Maid, Droga5 created "This Is Wholesome," an earnest and occasionally tear-jerking celebration of diverse families and acceptance. Having won work on Under Armour's women's apparel business, Droga5 also launched spots in 2014 that were as powerful as they were empowering, with stars Gisele Bündchen and Misty Copeland. Once again, Droga5 was Adweek's U.S. Agency of the Year. [kickout id="5"] This period illustrated to David Droga that risks were always worth taking when the agency believed they were right. Client longevity would continue to be a challenge for Droga5, as it admittedly is for all agencies, in the years ahead, but Droga said he believed that it was better to live with some uncertainty than with compromise. "If I do the right thing by my clients, they'll do the right thing by me. And the right thing to do for the clients is not to give them what they want. It's to give them what they need," Droga said. "We're not in the business of dictation. If you give a client exactly what they want, that's why they fire you six months later." In 2016, Droga5's relationship with Under Armour reached its high-water mark, with the "Rule Yourself" campaign setting the stage for that year's Olympics. In the campaign's most celebrated and hypnotic spot, Michael Phelps navigates his workout routine while quietly confronting his anxieties about whether he was past his prime. (He wasn't. Phelps would go on to win five golds and a silver in Rio.) The Phelps spot was named Adweek's Ad of the Year, and Droga5 tallied its third U.S. Agency of the Year honor. [kickout id="7"] "I felt immense pride," Droga said of the Phelps "Rule Yourself" spot. "I really loved it because the tone was so right, and it captured something of him. The stars aligned." (Unfortunately the stars weren't quite as aligned for future boundary-pushing work with Under Armour. While the agency and brand have continued working together, Under Armour underwent a series of marketing leadership changes and dramatically scaled back its ad spend.) [article_summary section="3"]The year that put everything to the test As 2017 dawned, Droga5 continued to seem unstoppable. Around this time, its staff ballooned to an all-time high of 650 as the agency tried to scale fast enough to support massive clients like Chase and the Google Pixel smartphone. The agency also launched its first work for The New York Times, now one of its most honored clients on the ad awards show circuit. Then came 2018. The year should have begun on a strong and positive note, with Droga5's Australia Tourism campaign, "Dundee: The Son of a Legend Returns Home," being one of the most charming red herrings in Super Bowl ad history. But as the campaign rolled out, Droga5 was facing an internal crisis that quickly spilled out into the public eye. Ted Royer, Droga5's longtime creative chief, was investigated and quickly terminated over allegations that remain unspecified. The agency would only note that it was committed to maintaining "a safe and inclusive environment for all our employees." Meanwhile, an agency that had enjoyed a seemingly unbreakable streak of growth since the decade began, was suddenly facing the very real threat of cutting back. In March 2018, Pizza Hut dropped Droga5 after just two years, just as several other core clients were scaling back their budgets amid industrywide contraction and insourcing. Droga5's leadership attempted to keep layoffs at a minimum in hopes that new business wins would make further cuts unnecessary, but with little good news coming in, the agency underwent three rounds of layoffs. It was a brutal period for a close-knit agency largely based in one office, but executives focused on transparency rather than turtle-shelling. They offered office hours for staffers to express concerns or ask questions, and the leadership's response, coupled with the ongoing output of strong work, helped avoid an exodus fueled by uncertainty. What came next was an impressive rebound in agency fortunes. Droga5's IHOb campaign, which purported to have changed the name of IHOP by flipping one letter, sparked widespread speculation and skepticism before being revealed as the International House of Burgers—which only sparked more speculation and skepticism. [kickout id="8"] The stunt, aimed at drawing attention to the breakfast chain's upgraded burger menu, generated PR and buzz on a scale few marketers can boast. It also brought a new wave of energy and enthusiasm to Droga5's internal and external perception at a vital time. For David Droga, the first half of 2018 was a painful but important test of the agency's ability to endure, evolve and remain focused on what's important. "I wouldn't wish it on anybody, but I knew that who we are and what we stand for runs very, very deep," Droga said. "The biggest opportunities and also the biggest challenges, we could solve within these four walls. At the end of the year, it was one of the most validating years for us." [article_summary section="2"]The acquisition While Droga5 has certainly made its share of ads in 2019, it has also unquestionably made news. In early April, Droga5 announced that it had been acquired by global consultancy Accenture Interactive for an undisclosed sum. As part of the deal, Accenture bought out Droga5's 49% minority-stake investor, Endeavor. It's a deal that rattled the ad industry, which has seen consultancies picking up agencies at an unprecedented pace in recent years. But it's also one that Droga wouldn't have considered at the dawn of the decade. "In 2010, I would have said, 'No way, maybe I'll acquire them,'" Droga said with a laugh. But as a decade of growth pushed Droga5 into bigger and bigger creative sandboxes, he began to see the potential in a partnership with Accenture Interactive, and the two companies spoke off and on for years. "I had never had any interest in doing a deal with anybody," Droga said, "but I kept going back to our conversations and wondering what we could do with them. What could do they do for us?" Thompson, the agency's global CEO, admits she had long been leery of acquisitions due to her experience with major agency networks and holding companies. But she said the Accenture Interactive offer was one that felt like it was "providing a canvas that we couldn't create on our own." "They are a company that is very much focused on cadence and space and getting it right, versus pure numbers," Thompson said. "They partnered with us because of our people. It's really important to them that we do maintain our culture and creativity, and they look to us to tell them how." [kickout id="9"] The most visible change for Droga5 post-acquisition might prove to be its geography. Now part of a global consultancy, Droga5 is showing clear signs of pending expansion into new markets such as Asia. "We're really interested in a more global footprint," Thompson said. Such growth would mark a new era for Droga5, which has kept its global operations rather tight in scope. After closing its Sydney office in 2015, Droga5 was left with only its London office, whose own fate also once seemed precarious. But the office has since thrived with clients like Uniqlo and Amazon Prime Streaming. Wherever the agency's future growth happens, Droga hopes the agency will continue to redefine itself rather than be seduced by the hubris of a successful and enviable legacy. "How do you not live off past glories, in an industry that loves patting itself on the back? I'm a very restless soul, so I'm always looking at how I can keep myself honest, how I can keep myself relevant," Droga said. "I still believe in the power of creativity. I have to believe in that. It's all I've got. And I'll keep fighting for that as long as I have."