Who Owns Your Big Idea?

NEW YORK It’s hardly a new development in marketing communications, but the fact that ad icons like the Geico cavemen are appealing enough to leap from 30 seconds to 30 minutes of prime-time fame is nothing if not reassuring to Madison Avenue’s would-be screenwriters.

The petulant prehistoric pitchmen, created by The Martin Agency (and who are the basis of an ABC sitcom pilot now in development) follow advertisement crossovers like Baby Bob, Ernest P. “Hey Vern” Worrell, The Noid, Max Headroom and the Dancing Raisins.

But while agency talent may be as capable of creating resonant characters as their Hollywood peers, there is one major difference: Agency talent toil under the constraints of work-for-hire agreements that are an out-of-date acquiescence of intellectual property in a digital era where the lines of content distribution blur across advertising and entertainment channels.

Attorney Doug Wood, a partner at Reed Smith, New York, said, “If you look at the typical agency contract, it says: ‘Ad agencies transfer the ownership of all ideas and concepts to their clients.’ [Clients] can say, ‘The agency can’t use that idea anywhere else. It can’t control where I, the marketer, use it, how I use it, whether I use it at all.’ There are exceptions, but generally speaking, they hold fast to the idea that ‘you’re my agent and I don’t [pay to] retain you and then give you additional royalties and license fees. You’re like buying a pencil. Just because I use you for another purpose doesn’t mean I have to pay for you again.'”

While in the past, marketers might pay out additional compensation when they extended the use of a campaign into new geographical regions, the same does not apply to their taking it in new digital directions.

“The old model is that the client owned all intellectual property that was published and would go back to the agency [to discuss further compensation] if they were doing anything new with it,” said Rick Kurnit, a partner at Frankfurt Kurnit Klein & Selz, New York. “That’s not happening now, when the content an ad agency creates can have all sorts of platforms as clients repurpose it in the new digital world.”

Even in the industry’s more traditional repurposing of ideas, agencies are losing out. In the first year of selling $4.99 Easy Button novelty items—adapted from Staples’ ad campaign from McCann Erickson—the marketer rung up $7.5 million in unanticipated sales. Travelocity’s Roaming Gnome statues are proving so popular at $19.99 a pop, the company is offering a bigger model at $64.95.

The digital era adds new urgency to such issues in that ongoing industry debate. While newer agencies like Anomaly and Crispin Porter + Bogusky address those concerns through new compensation models (that mostly work on a case-by-case basis), such as the latter’s 2006 deal with Haggar, in which the agency’s payment was a small stake in the clothing company, the industry overwhelmingly remains mired in timesheet traditions.

Brad Brinegar, CEO, McKinney, who’s worked with the Association of American Advertising Agencies on this issue, said agency practitioners bear some of the blame.

“It’s a very complex topic that I don’t think we’re doing a good job with, but not for lack of trying,” he said. “As a fragmented industry, we’re definitely the seller, not the buyer. We don’t have the power in an industry where Joe Blow will open an agency next door to us and undercut on price.”

For the last 18 months, the 4A’s has spearheaded educational seminars about how intellectual property is structured and monetized at member agencies.

“As advertising has become increasingly about content, agencies are no different from industries like publishing, motion pictures, video games, music, etcetera,” said Tom Finneran, evp, 4A’s agency management services.

“Yet the structures of idea ownership are different. Agencies need to develop their own content and take it to market as a product or service they would license to advertisers.”

Production companies are concerned about this as well. Matt Miller, CEO, the Association of Independent Commercial Producers, said his group formed a division called AICP Next to create guidelines addressing the realities of how his members now work and are compensated in a digital world. Production companies now find themselves in new kinds of working relationships—sometimes working directly with clients—and in new roles, producing creative or acting as media distributors in instances like viral campaigns. “A production company will still work for hire on a commercial, but will not work for hire in other [new, digital] situations,” Miller said.

The entertainment appeal of Geico’s cavemen underscores the notion that many industry ideas have value beyond advertising. Marketers like Geico—who own those characters and have invested millions of dollars to be identified with them—are finding themselves in new territory very much unlike traditional product placement. How much creative control can the insurer expect if ratings-seeking TV writers cook up a plot where one of the cavemen goes on a high-speed car chase or indulges in otherwise reckless driving?

Joe Lawson, The Martin Agency copywriter behind Geico’s cavemen, who is writing the ABC pilot, needed client permission to do that.

Industry creatives are still second-class citizens when it comes to after-market use of their ideas.

Even their partners in producing work—musicians and photographers—retain ownership rights to their work.

Agency compensation issues aside, the question remains: What is the impact on industry creative people as a result of antiquated practices involving the ownership of intellectual property?

Rob Siltanen recalled feeling frustrated after missing an opportunity while a Chiat/Day creative director. He said he was contacted by Tri-Star about making his Nissan “Toys” commercial into a TV series, but he couldn’t rally the agency’s support.

When Siltanen left to co-found Marina del Rey, Calif.-based Siltanen & Partners, he wanted to build an agency that could be responsive to such Hollywood deals.

Less than a year after starting that business, he created “Baby Bob” for Internet service provider FreeInternet.com in the late ’90s.

Siltanen retained ownership of the character, and after the ISP declared bankruptcy in 2000, he shopped the precocious adult-voiced infant. In 2002, CBS aired a sitcom based on Baby Bob, but it lasted only nine episodes. The character resurfaced in 2005 as the spokes-tot for Quiznos. (Last June, Baby Bob once again found himself in the unemployment line after Quiznos fired him.) No matter: Siltanen said comedian Martin Lawrence’s production company has expressed interest in some of the agency’s current puppet characters created for client Round Table Pizza as the basis for a possible TV series.

Ron Urbach, a partner at Davis & Gilbert, New York, whose law firm was involved with Siltanen’s Baby Bob situation, said: “That was an early lesson in how agencies should think about these issues. It was valuable for the agency to hold on to that idea, that property, so much so he’s used it three times and maybe there will even be a fourth time.”

It’s a tricky situation. In agency contract negotiations, marketers probably wouldn’t appreciate knowing their millions in media dollars underwrite the exposure of potential fodder for Hollywood, and future earnings for agency creatives who are already paid nicely to produce advertising.

Yet the dilemma facing agencies locked into traditional work-for-hire contracts with clients is how to get the best work out of talent—the same sort of people who could expect the fame and riches their ideas might bring in entertainment venues.

“If [as an agency creative person] you have a really great idea, you begin to think, ‘If I serve this up as an ad concept, I’m going to lose all control of all the future benefits and opportunities,'” said Bill Davenport, executive producer, Wieden + Kennedy Entertainment. “You begin to think: ‘Maybe I should take this idea somewhere else.’ When that happens, it does everyone a disservice.”