Ad agencies earn the bulk of their revenue from well-established clients with the size and name recognition required to spend millions on marketing in a given year.
But an increasing number have ventured into more entrepreneurial territory, and mcgarrybowen recently became the latest to do so with mbForge, a "division dedicated to growing startups." The Dentsu shop announced the launch of this new unit by way of its first official client, alcohol delivery service Drizly.
"We have to grow clients, not just promote them like we did before," said the agency's chief integration officer Phil Gaughran, who described mbForge as an evolution in the way mcgarrybowen approaches its accounts. "We are not a tech-first company, so from our perspective it was about engaging with a community [of entrepreneurs] that has high importance but not marketing expertise." The pitch, then, is to provide up-and-coming tech-focused businesses with the services of a creative agency whose client roster includes more traditional brands like JC Penney.
Gaughran also said that mbForge differs from other recently-announced entrepreneurial projects like the Publicis90 competition, WPP's sporty Courtside Ventures and R/GA's Start-up Academy. Mcgarrybowen only considers venture capital-backed companies currently in the seed, series A or series B funding rounds for potential partnerships—and unlike other agencies, it does not look to own or absorb these businesses.
"We are not an incubator … we're not looking to take [clients] in-house and make them part of mcgarrybowen," Gaughran said, calling mbForge a space for experimentation with new business models. "We see it as a testing ground for us," he added. "Revenue share on sales is a model we look at with couple of clients, and equity is another. It's a good model for how we can adapt to changes in the ad industry. Soon enough, the idea of billing by hour is going by the wayside."
Reade Maier, a 22-year-old member of mcgarrybowen's new business team, first presented the idea for mbForge after last year's CES conference. At the event, one host asserted that "90 percent of these companies here today will be out of business in a year" while "the other 10 percent will become the next Facebook or Google."
"Failure is part of the business now, and you're going to learn from each iteration," said Gaughran, but mcgarrybowen has confidence in the viability of Drizly. The company, which calls itself "your online liquor store," aspires to be the alcohol delivery equivalent of Uber or Airbnb, but currently lacks the brand awareness required. After launching in San Francisco and closing its B round of funding, Drizly looks to expand with the help of a new mcgarrybowen campaign led by the copywriter/art director team of Bridget Kelly and Liv Pedersen under the tagline, "There is always a reason to drink."
The digital, OOP and print work ran throughout the holiday season in New York, Boston and Denver.
Agencies have retained small-scale clients for years, but Gaughran believed 2016 was the time to act aggressively as more businesses moved away from agency of record-style relationships. "We have to change; there's no other constant left in the industry," he said. "[mbForge] could even be a recruiting tool."
Several companies beyond Drizly have signed with mbForge, and a small number of mcgarrybowen staffers work exclusively on the startup division in the New York office with employees based in San Francisco, Chicago and other locations pitching in.
"I think 'startup' is a buzzword," Gaughran said in summarizing the philosophy behind this new effort, "But it would be to our detriment to ignore the ways they think and function. You can't just protect legacy and market share anymore."
CREDITS
Agency: mbForge/mcgarrybowen
Client: Drizly
Chief Creative Officer: Matthew Bull
Senior Copywriter: Bridget Kelly
Senior Art Director: Liv Pedersen
Experience Design: Marta Fieweger
Chief Integration Officer: Phil Gaughran
Forge Lead: Reade Maier
Senior Print Producer: Vanessa Peneda
Senior Project Manager: Meredith Murphy