Ad Land Goes Cyber

An illustrated children's book is making waves in, of all places, the world of advertising. StrawberryFrog and the Big Dinosaur describes traditional ad agency networks as dinosaurs: "This one is the Bureaucratosaurus and is known for its long meetings and piles of paperwork. The Egosaurus never listens to anyone." The book gloomily concludes that "the days of the dinosaur are numbered." And in its place will be "a creature he wishes had never been born. Something quicker, smaller, more versatile, and a hell of a lot better-looking."

StrawberryFrog and the Big Dinosaur is not meant for the precocious toddlers of ad executives. It is rather a "manifesto" produced by the founders of StrawberryFrog, an Amsterdam-based creative consultancy which sees itself as a leader of a new breed of virtual ad makers who use the Internet to reverse the relationship between marketers and their ad agencies. Traditionally, companies focused on their business and left it to agencies such as Saatchi & Saatchi, J. Walter Thompson and Young & Rubicam to boost market share through brand awareness. But reaching Europe's fragmented broadcast, print and online audiences gets tougher by the day.

Unlike conventional ad agencies bogged down by bureaucracy at hundreds of offices worldwide, virtual operators focus their smaller, more nimble operations using the Web to hook into a worldwide network of freelance creative directors, art directors, copywriters and designers. StrawberryFrog's 20 full-time staff, from the U.S., Canada, Switzerland, France, the U.K., Sweden, Belgium and the Netherlands, operate in cyberspace with a network of about 50 experienced freelancers.

What should concern the big agencies is that these virtual creative shops are not just luring experimental dotcom accounts, they've also wooed and won the attention of big advertisers seeking a 21st century image for their 20th century brands. StrawberryFrog has created off-line and online international campaigns for, among others, pharmaceutical powerhouse Pharmacia Corp.; elle.com, the upmarket Web portal for women's glossy magazine Elle; and Tektronix Colour Printing, recently acquired by Xerox. Similar agencies include Sweden's Framfab, in Stockholm, which has clinched jobs from Nike. Agency.com does similar work for British Airways.

"The [Internet] technology for the first time is allowing us to have the same information and knowledge control as any of the big agencies," says StrawberryFrog co-founder Scott Goodson, former creative director of JWT Canada. "In the old economy, only the big [agency] corporations had the resources. Today, the Internet is democratizing information."

The Internet also allows the informal exchange of conventional and radical creative ideas online without reproach. And the medium's flexibility enables clients to comment without the fear that they'll get a funny look from someone.

It is this relatively relaxed but efficient approach that helped win over the U.K.-based European marketing team for printer manufacturer Tektronix, which was previously with ad agency Anderson & Lembke. StrawberryFrog stopped using trade publications and placed the recent campaign in trendy international titles such as GQ, Wallpaper* and Esquire to reach the creative types who use printers in their everyday work.

Goodson says the campaign was ready in about 18 days instead of up to eight months at a conventional international ad agency. "Despite the short time from the initial briefing, we hit every one of our copy deadlines," says U.K.-based Rhett Ewer, European marketing programs manager for Xerox Office Printing Business.

Virtual agencies have also prompted some international advertisers to dump the big ad agencies, or to reduce their roles. This enables companies to pick and mix different, and even rival, local ad agencies and consultancies to create a network that can be customized project by project. Dutch beermaker Heineken and Emirates Airline in the Middle East have both used this approach. Apart from a few face-to-face meetings, these clients and their virtual agencies consult online and can watch an ad's progress via the Web from anywhere.

When Heineken opened an interactive marketing division last year, it also set up a virtual agency, which includes the Dutch office of the ad firm TWBA, Arthur Andersen Consulting, interactive agency Agency.com and a handful of Web consultancies. They hold their meetings on a password-protected Internet site. Rene Hooft Graafland, Heineken's head of international marketing in Amsterdam, says that as young people spend less time watching TV and more surfing the Net, the influence of traditional advertising is diminishing. "That changes the roles of the agencies," he says. "They should spend more time and resources understanding the consumer, the Internet and how people behave in this new environment." For example, Heineken's virtual agency is pushing the brand through Bartrek, an online guide to the best bars worldwide.

Although Heineken has no plan to dump its international ad agencies the Lowe Group worldwide, plus Bates for Asia Hooft Graafland says the main marketing department is considering adopting the virtual model for other elements of its communications strategy.

Last month, Emirates Airline launched a virtual agency after parting with its lead international agency BDDH. Dubai-based brand manager Steve Wheeler has chosen the local offices of 12 key ad agencies, such as Ritter in Germany, Conquest Materia in Italy, BBDO in Dubai for the Middle East and London-based Traffic Interactive for online activities. Wheeler hopes that by having access to Emirates' encrypted site called EmPower, these local agencies will exchange ideas and compete for key accounts.

Do virtual agencies spell the demise of big ad agencies as we know them? "They have been maligned for many things and because they are not changing fast enough they are losing a share of clients' minds," says Chan Suh, chairman and CEO of Agency.com, an international interactive agency network.

The big agencies will not, however, simply leave the field to these feisty newcomers. Marco Rimini, director of strategy and development at JWT London, says the Internet allows the large firms to slash bureaucracy while still capitalizing on the immense global resources that virtual agencies will never have. Susan Scrimgeour, business development director at Young & Rubicam Europe, Middle East and Africa, agrees: "If clients come along and say we need to move quickly, we do. The Internet is the key driver of change."

Even the folks at StrawberryFrog admit the virtual model can't be all things to all advertisers. But the ability of small players to challenge the big boys and push boundaries by leveraging the power of the Internet is changing the face of the business. As Agency.com's Chan Suh observes: "How do you prevent chaos but at the same time encourage innovation? There's no easy solution." But a new army of small players will be snapping at the big agencies' heels, ready to bite off bits of their business.