So much depends on the Rap Cat, a stuffed animal purchased online for $17.99, dressed in an infant’s basketball jersey, and yanked with fishing line out the door of the Don Juan bodega on Forsyth and Broome Streets over and over again. It was February when the film was shot, and crammed into the Don Juan were maybe twenty people from Amalgamated, the ad agency that had been working on Rap Cat for nearly a year. All around them were writers and producers, cameramen and a puppeteer, and the woman who asks passersby to walk into traffic so Rap Cat can do his scene.
Since then, it’s been a Cinderella story for Rap Cat, and for little shops like Amalgamated. Rap Cat is a genuine phenom, based on a simple joke: He’s a cat, he raps. Born in a throwaway scene in a TV ad for Checkers, a drive-through fry-and-burger chain, Rap Cat took off when a user called grandefutbol24 posted the ad on YouTube. It was a marketer’s dream, of course, spawning many thousands of voluntary viewings. And then Rap Cat went “viral,” with all the agglomeration of style, form, meaning, and nonsense that has come to characterize an Internet movement. Fans started making their own Rap Cat videos and posting pictures of themselves dancing like Rap Cat. They uploaded videos of their own live cats rapping and filmed themselves calling up strangers and meow-rapping repeatedly and generally applied all the random intellect of the mass mind to the concept of a rapping cat. Today’s project is the music video. An album, ringtones, and merchandise are all in the works.
The shoot was a long dreary process of scooting Rap Cat out the door again and again, and the day went very late, but it meant Amalgamated could try once again to demand the attention of users like sythblade22, psycotikbastard, and fishbucket–head. And they succeeded. Five months later, fishbuckethead is one of more than 838,654 users so far to visit YouTube and watch the video. He added his thoughts, which read, “dgbgffjf gfgfgjgfgfddsdgfghhghgjglfglgf.” It might be gibberish, or it might be an ironic comment on the literacy rates among rapping puppets. Or add a few dollar signs and an exclamation point, and you have a pretty good description of advertising in general, as an industry gropes to figure out the collapse of one medium and the rise of the next.
Step from a crappy elevator into a loft and you are at the headquarters of Amalgamated, but you could be at any of the little agencies that have sprung up in the city in the last few years. They’ve slipped like hermit crabs into the shells of studios and galleries and other inspiring spaces, mostly in Soho, sometimes in the teens, only rarely (as in the case of Amalgamated, which is in the West Thirties) farther up, and in general have adopted the vibe of an Internet start-up, circa 1996.
The very oldest appeared at the tail end of that boom, but most started in the last three years, arriving now at some Malthusian spawning frenzy. Their numbers relate directly to the rise of a true boom in Internet ad spending, as corporations retune their strategies in a once-in-a-generation way. The Internet currently represents a little more than 6 percent of a $149.6 billion ad market, and it’s the only fast-growing sector of an otherwise shrinking business, going up 20 to 30 percent annually in the U.S. and faster abroad. Moreover, the field is wide open.
It’s altogether enough to tempt you to quit whatever you’re doing and start your own mini-agency, and it would probably be a good idea to do so. You’ll need a quirky name. Fifties-style monikers like Ogilvy & Mather, Wieden + Kennedy, and J. Walter Thompson are on the way out, as are initials, making DDB Worldwide, BBDO, and JWT, as J. Walter Thompson belatedly rechristened itself in 2005, seem dated. Most of New York’s micro-shops, instead, seem to have stolen their names from dweeby bands trying to cut their own vinyl in Brooklyn: Besides Amalgamated, there’s Anomaly, the Barbarian Group, Big Spaceship, Campfire, Droga5, Deep Focus, Mother, Taxi, and Toy, just to list a few.
A rush on talent has followed. Salaries for digital creative directors rose 60 percent nationwide in 2006, from an average of $115,000 to $185,000, according to a survey by the recruiter TalentZoo. “We’re trying to hire two people right now,” says Charles Rosen, “and we cannot find them.” Rosen is one of the co-founders of Amalgamated, which started with six people in 2003 and has just hired its 40th employee. “People who were juniors when we left Cliff Freeman, where some of us used to work, want $250,000 or $300,000 now. Good solid people are looking for half a million dollars. Headhunters will say, ‘We have a great team for you,’ and we’re like, They were our interns! They’re, like, 8 years old! They can’t be a creative director—they don’t even shave yet!”
Rosen, who is 40, is sitting amid a scene of abundant expansion and disarray. One of his friends told him once that he looks like the new Bond, except much rounder and much balder. He says he’ll take it. Cables are everywhere, and there’s blue tape on the floor where the cubicles are going to go. They’ve just expanded, again, and they haven’t even had time to install the high-end espresso machine. On the table in front of him are stacked magazines and a copy of Fredric Jameson’s Marxism and Form, surely a plant to impress visitors. “No, that’s someone’s,” says Rosen. “We have, like, five Ph.D.’s around here.” Around him, his 39 hands all seem bustling and happy and unaware of the class struggle. They should be, what with their bubbly salaries, an agency-provided summer house on the Jersey shore, and a winter ski house up at Stowe.
Amalgamated worked with Deep Focus, another small agency, on their highest-profile campaign to date, for Court TV’s Parco, P.I. It started last summer with a billboard on Houston Street, one that read in block letters:
Do I have your attention now?
I know all about her, you dirty, sneaky, immoral, unfaithful, poorly-endowed slimeball. Everything’s caught on tape.
Your (soon-to-be-ex) Wife, Emily.
P.S. I paid for this billboard from OUR joint bank account.
Gawker and many New Yorkers and whoever else cared to check soon stumbled on a blog by “That Girl Emily,” which gathered a million hits in a few days. At Deep Focus, a copywriter spent weeks playing Emily, logging entries and answering e-mails. She crafted a love story that started months before the billboard went up and ended with “14 Days of Wrath,” an elaborately staged retribution that included a BMW spray-painted I HOPE IT WAS WORTH IT getting towed around New York, and an actress tossing “Steven” ’s belongings out of an SUV near Bryant Park. The events were filmed and slipped onto YouTube and posted under titles like “Angry Wife Rampage!” That one gathered 284,275 views.
Deep Focus was started in 2002 by Ian Schafer, a 32-year-old veteran of the first Internet boom who’d worked at Miramax for three years. He now has more than 70 employees, and just moved from Dumbo to the West Village. He’s run the online work for The Sopranos and Nike’s rollout of the LeBron sneaker, and his campaign for Entourage featured an “interview” with agent Ari Gold in which visitors were granted a personalized tongue-lashing. Schafer keeps a family tree of the conglomerate agencies on the wall in his office, so he knows who’s calling to offer to buy him. He and the other shops get calls like that a few times a month.
Perhaps the most successful campaign to come out of the New York agencies was created by Droga5 for the hip-hop clothing line Ecko Unltd. In the spring of 2006, Droga’s first client, Mark Ecko, hired the agency to create a short in which mock commandos in backpacks tag Air Force One with the company’s STILL FREE graffiti logo. It’s a little masterwork of the faux underground, shot in infrared with a cheap camera, and so convincing that the Pentagon had to issue multiple denials that the event had happened. (It looked amateurish, but that video cost nearly $400,000—$150,000 went to repaint an old 747, and the director’s day rate was $25,000.) Droga “seeded” it in May 2006, sending it to counterculture Websites, and he claims that, with media coverage, the video generated more than 115 million impressions. By comparison, a Super Bowl ad draws 93 million viewers, half of whom are mindlessly staring into a bowl of Cheetos, and that 30 seconds can cost well over $2 million.
Jason Deland, a partner at Anomaly, yet another new small shop in Soho, collects quotes about the current disarray in advertising. One of his favorites is from A. G. Lafley, the CEO of Procter & Gamble, year after year one of the biggest buyers of advertising in the United States: “We need a new model. It does not exist. No one else has one yet. But we need to get going now.” (Bob Garfield, who writes a column for Advertising Age and co-hosts NPR’s “On the Media,” calls this “the chaos scenario.”) DeLand’s other quotes veer deep into the fog of adspeak, but their message is the same: The ad world is a forest on fire, and these shops are a bit like those mushrooms that pop up after the inferno.
The telltale numbers run in the papers almost every day, or on Google, if that’s where you get your news. Television is in retreat. For those who do continue to endure TV, digital video recorders are killing ads. NBC, admitting its model was in distress, announced in October that it would cut its news and programming budget by $750 million and 700 jobs. Budweiser, Pepsi, and other big marketers, anxiously watching that audience drain away, have started what are essentially their own television channels online, providing their own programs for their own customers. Newspaper ad revenues and circulation are similarly riding an alpine slide.
For marketers, all this amounts to the disappearance of a readily available mass audience. The Internet audience is far more fragmented, picking content in nearly random ways, and the barriers to creation have dropped as well. You could be a kid with a guitar or a team at a 12,000-person agency, and you have about the same chances of mass success on YouTube. The odds might even be slightly in favor of the kid with the guitar, especially if he could play like funtwo, who has racked up 23 million views for his version of Pachelbel’s Canon.
The threat to the traditional agency model, with a stable of “creatives” trained to provide print, radio, and television ads to a passive audience, is obvious. If you’re a big marketer, why would you hire an enormous staff at great expense when you could have somebody like those guys who made the funny JibJab video about Kerry and Bush, the one that everyone saw and loved, for relative pennies? Budweiser asked itself the same question, and hired the guys who created it for the brand’s new Bud.TV “network.” Or you could swing by some cool shop in Soho. The little ad shops, in a way, are just glorified and more corporate-friendly versions of those geeks coming up with stuff in their bedrooms, and it turns out it’s a great way to make an ad.
Which may be why they are now competing against enormous marketing and advertising agencies, all of whom are starting their own little hot shops. For some of the larger agencies to appear small and fresh and full of new ideas would seem an insurmountable challenge. One of the biggest, for example, is DDB Worldwide. It has been around for nearly 60 years, it has 10,000 employees, and it is just one part of Omnicom Group, the world’s largest marketing and communications holding company. Omnicom also owns ad firms like BBDO, TBWA, and GSD&M. (Even the name “Omnicom Group” sounds like it was invented for a movie about an all-engulfing, soul-crushing corporation.) If a trend looks promising, it is no problem for Omnicom to open up an office, give it a kooky name, and see what happens. So DDB’s “little” Internet shop, Tribal DDB Worldwide, appeared in 1998 and now has 38 offices, 1,000 employees, and, with clients like Philips Norelco, Pepsi, and Exxon, about $160 million a year in revenue.
It doesn’t seem a fair fight until you visit their HQ, which is actually on Madison Avenue. It’s a typical cubicle penitentiary, with that weird polymer smell of industrial wall-to-wall carpeting. You wait in a truly windowless waiting room. This is no Soho loft.
But, of course, it is not as bad as it looks. At the end of the hall is the office of Matt Freeman, 37, the global CEO of Tribal DDB, an appealing guy in the old New England mode, with the shoelaces on his bluchers untied in what must be a kind of subtle nod to the ancient code of the nutty adman. A PR woman settles in on the couch with us to monitor the talk.
Tribal seems like a success. The Wall Street Journal gave it a Best Ads of the Year award, and a spot about a Philips razor meant for men who don’t stop shaving at the chin (shaveeverywhere.com) ran up nearly 2 million unique visits. As with the little guys, the numbers are good; their 2006 revenue represented a 60 percent increase over the previous year.
Freeman is as uncertain about how the future will unfold as most people in the business. How does a company like DDB, for example, fit into a model like Revver, a new site that supplies video as YouTube does but gives revenues to the creators? Not only do you not buy time on Revver—you’re supposed to get paid for it. It’s completely backward! Anyway, he doesn’t know. Weirder still, he says, “you could argue that our clients are becoming media companies themselves. They have audience aggregations on their own sites that are significant. Everybody has switched seats.” Pepsi’s Website, he points out, is more like a TV station than anything else, and it’s drawing better than some of those.
It’s an upbeat and interesting talk, but, still, there’s that PR woman hovering at the end of the couch. It is a hint that, despite all the fun, there is danger around. Or, as Amalgamated’s Charles Rosen, also a veteran of the last Internet boom, puts it, “it’s not sustainable. Of any eight companies you write about, I guarantee you no more than three will survive.”
But never mind all that downer talk. Right now, the money is flowing. Droga calls it a “gold rush,” and that is only one of many frontier metaphors floating around these days. As one director working on a viral campaign for Intel told me, “If I hear anyone say ‘It’s the Wild West out there’ again, I’m going to vomit.”
As for Rap Cat, his video went live on rap-cat.com in March, and Rosen says it’s been getting 30,000 hits a day. Rap Cat has thousands of friends on his MySpace page, and the fan club has been gaining about 500 new members daily. That’s in addition to the 800,000-plus viewings on YouTube.
The Rap Cat ringtone isn’t out yet, but Amalgamated is turning its attention to new campaigns, which include another Court TV promotion and an online global-warming initiative for Ben & Jerry’s. And Amalgamated continues to grow and field offers from conglomerates. “We’re talking with the landlord about taking over the sixth floor,” says Rosen. “And if we can’t do it, we may have to move again.”
CASE STUDY: BLOCKBUSTER
Problem: Losing customers to Netflix, and facing a hazy future once we all get movies via broadband.
The Pitch: Up against Netflix, Blockbuster has been trumpeting the impulse-friendliness of its retail stores. (You may want Dr. Zhivago today, but by the time it arrives, you’d really rather see Dr. Giggles, and a trip to the store beats a three-day mail turnaround.) This is a tactical campaign blowing out Blockbuster’s current work. It begins with this mailer (1), and continues on Regretflix.com (2), with trailers for those DVDs (3) you don’t want but somehow chose anyway.
Agency: Deep Focus
The Pitch: Everyone, even hipsters, loves to hate hipsters. Even worse is a “Netflixter,” a movie nerd defined by his Netflix queue. With interviews filmed in front of Blockbuster stores, we’ll call attention to those who sacrifice sense for a cool façade. (“I rent a lot of Godard. His films look great projected on the walls at my loft parties.”) YouTubers will be encouraged to record their own.
Agency: Tribal DDB
The Pitch: The “movie widget.” Offered as a downloadable freebie for MySpace or Facebook pages, it allows groups of friends to vote on their evening’s rental. Also, customers will be asked to create and upload videos about how they and their friends decide what movie to watch. The best video wins a year of free rentals; the whole campaign costs less than $20,000 and can be done in three weeks.
CASE STUDY: MAALOX
Problem: The memorable “Maalox Moments” campaign was long ago, and newer remedies own the agita beat.
Agency: Deep Focus
Problem: Nothing beats an old-fashioned rumor. Joey Chestnut, the newly crowned Nathan’s hot-dog-eating champ, is known for dunking buns in water before gulping them down—water that, we suggest, may have been “enhanced” with a little Maalox. A doping charge, whispered just before next year’s competition, would be a major talking point.
Problem: Various devices under the tagline “Because Some Things in Life Are Hard to Stomach.” Visitors to hardtostomach.com would submit ulcer-rich stories of stress. The best would become 30-second YouTube videos and new “Maalox Moments” TV spots. We would also put Maalox coolers in offices, offering a ready supply of gastro-relief. On the street, we would hand out Pez dispensers shaped like stressed businessfolk, and distribute Maalox Shooters in front of the NYSE on days when the Dow falls 5 percent or more.
Agency: Tribal DDB
Problem: Online teaches us that people need to laugh before they can listen. A simple microsite called “The OXenator” would allow users to click and hear an array of gaseous sounds while watching video fed from YouTube. Every video out there could become the butt of a joke. Think of the movies you could make: Gaslite, Fart of Darkness, The Fartastic Four, to name a few. (Just search that glorious juggernaut YouTube under “Fart Wars” and you’ll see what an inspired online user can generate.)