and Get It

Net Glut Means Clients Have to Woo Shops
NEW YORK–As the vice president of marketing for a startup with $10 million to spend on advertising, David Mandell expected to face an embarrassment of riches when he went looking for a shop.
Instead, he said he practically has had to beg for meetings with new-business executives to discuss handling, which made its Web debut Jan. 28.
“I spent a lot of years on the agency side pitching business,” said Mandell, who has worked at Earle Palmer Brown and Cohn & Wolfe, both in New York. “Now I’m the client, and I’m pitching agencies. I want somebody to pitch to me for once.”
While some ad agencies are still jumping on the gravy train, others are turning down
several inquiries a day from potential Internet clients.
Most cite poor financial backing or flawed business plans as the reason for their disinterest. Some feel they have as many dot.coms as they desire, and others simply shy away from the compensation arrangements that often come with these Internet clients: stock options instead of cash.
Mandell said he has the financial numbers to show that the site is an attractive long-term opportunity.
FunkyTalk’s flagship offering is a hybrid Net game show/sitcom that is called, “uDrive,” in which three young comedy writers travel by van from Miami to San Diego.
Viewers of the show can post suggestions on what the trio should do next, based on the team’s daily video and audio reports of the trip. UDrive is in beta test.
“But I’ve talked to so many people who couldn’t even meet with me,” said Mandell. “They’re all resource-constrained.”
Jeffrey Winsper, president of TFA/Leo Burnett Technology Group in Boston, said he turns down inquiries about twice a week. “The criteria set for the agencies has changed,” he said. “We’re in the driver’s seat now, as it applies to due diligence. It tends to be less about money and more about [the] maturity level” of the prospective company.
Yet another account currently in review is Juno Online Services, which will spend about $20 million.
DDB Worldwide here is defending the account it won in December 1998, but several other highly regarded creative shops have elected not to return the questionnaire, even though the Web portal is a well-established company with proven financial viability, said sources.
“Given the number of new-business opportunities out there, you have to choose your resources carefully,” said one executive, whose agency passed on Juno. “We don’t have the bodies to put against going after these things.”
AAR/Bob Wolf Partners here is handling the Juno review, and representatives there said they have received “a healthy response” from interested shops.
One source theorized that the industry is unwittingly cannibalizing the agency business.
“Shops don’t have the staff because the sharp, creative, strategic thinkers they need to work
on these businesses work at the dot.coms themselves,” the source said. “Agencies complain about a lack of talent all the time.”
Dot.coms spent about $1.8 billion in media through October 1999, per Competitive Media Reporting.
–with Lauren Wile