Feb. 1, 2017
How a new agency is displacing big dogs and Big Data by thinking small
Last spring, General Mills sent shockwaves through the agency world with the announcement it was launching a review of all its creative part ners for U.S. retail brands. Lucrative part nerships with power players McCann, Saatchi & Saatchi and Wieden & Kennedy were all under examination, all put on notice with a terse statement released by the company and attributed to no one in part icular: “We have a responsibility to ensure we have the right agency partners to continue growing our business, and agency reviews are a routine part of running a successful business today.”
Much of the industry kicked into high gear, putting together proposals. At stake was more than $700 million of ad spend hyping supermarket staples such as Betty Crocker, Cheerios, Nature Valley and Yoplait. By the time the dust settled at the beginning of December 2016, 72andSunny and Redscout, both owned by marketing holding company MDC Partners, were tapped as agencies of record (AOR). Three other shops—Joan, The Community and Erich & Kallman—were named as “preferred U.S. project-based agencies.” For San Francisco-based Erich & Kallman, the announcement capped off a year ripe with winning. Well, three-quarters of a year.
The indie ad shop had only announced its formation that April, weeks before word of the General Mills agency review trickled out. By the time it became a preferred project provider for the food giant, it had already landed other highly sought clients, including Chick-Fil-A, which choose the Bay Area startup over five rivals after dumping The Richards Group, its AOR for the past 22 years.
A STAR IS BORN
To agency managing director Steven Erich, success was welcome, but not altogether surprising. He formed the agency with co-eponymous creative director Eric Kallman after decades spent playing midwife to marketers’ gestating brand identities. That’s given him some strong hunches about what the people who place ad orders are looking for. “I’ve always thought, ‘Why does the world need another advertising agency? There’s plenty of them,’” Erich says. “I didn’t want to do something that just didn’t make any sense.”
Bucking much of modern marketing thinking, Erich wanted his agency to eschew the drive toward Big Data, as it was neither he nor his partner’s forte. “Everything that was happening in the industry was around the tech-based stuff—data learning and programmatic, [with] much more data analysis at the center of the offering and things that were focusing on media,” he says. “If analytics is gaging how people are using the products or buying the products, that’s fine. … Where I’ve not seen it successful is deciding what advertising is successful and what’s going to move the market.”
Erich and Kallman saw themselves as experts of the artistic side of advertising. Pathos, ethos and logos subtly working within a captivating mise-enscène. And, Erich says, these experts are most absent in today’s ad world.
“We don’t really think creative work has gotten better in the past few years. In fact, it’s gotten worse,” he says. “We thought there might be an opportunity to focus on the creative product. Not the technology, not the data, but the engagement of consumers. We have that going for us.”
It’s clear the partners are on the same page. While with another agency in 2010, Kallman espoused a similar philosophy on YouTube’s “Show + Tell.” “There’s no way to sway anything, except with creativity and except with ideas,” he says. “It’s almost like the solution for advertising … is to want to be more creative, because now you’re just trying to make something people want to look at or watch just as much as the actual article or program or whatever it is.”
Kallman most recently spent time at Goodby Silverstein & Partners, filling the role of executive creative director. Before that he held the same position at Barton F. Graf and was a copywriter at TBWA/Chiat/Day and Widen + Kennedy, where he notched a towering career highlight when he co-created “The Man Your Man Could Smell Like” campaign for Old Spice.
Erich spent the bulk of his career at Crispin Porter + Bogusky, rising through the ranks as an account manager and later managing director, before being named president at the start of 2014. It was at CP + B the pair met one another. Kallman was looking for an exit from Barton F. Graf and was going through the interview process at CP + B. The outfit liked him and extended a job offer. Erich made a personal pitch for him to join corporate headquarters in Boulder, Colorado. But in the end, Kallman declined and decided he’d rather return to his native San Francisco.
About 18 months later, both men were free agents, having left their respective places of employment. They arranged a phone call to discuss career prospects.
“I thought [Eric] would take another big role at a big ad agency, but he was interested in starting his own thing, and I had been investigating starting my own agency,” Erich says. “I immediately said we should do something together. I think so [highly] of his work, and I thought it would be a unique and powerful combination.”
The pair spent a few months canvassing contacts to assess interest in their vision. Receiving affirmation, they moved forward. By the time of the official unveiling in April, they had already completed work for MTV and were pitching Chick-Fil-A.
EXTRAORDINARY POPULAR ILLUSIONS AND THE FADNESS OF CROWDS
Just because Erich & Kallman are creative, it doesn’t mean their work is overwrought or high-concept. Quite the opposite, Erich says. More than anything else, they prefer to make ads that are sure to be talked about.
“The work we’ve done in the past is not niche, award-winning or things that are inherently personal or one-on-one. It’s very broad, water-cooler kind of stuff,” says Erich. “It’s work meant for people to see and react to and share and then hopefully move them to purchase or the [desired] action.”
While others may be looking to nurture a personal bond with a consumer, Erich & Kallman want to be quoted. The way they see it, the more intimate the ad, the less people talk about it with one another. “The work that we do is meant to be broadly appealing and shareable because it’s a better way to spend your money. Your media buy increases much more if people are going to share with other people,” Erich says.
A lot of the time this means being funny. The ads they created for Chick-Fil-A hyping its new Egg White Grill breakfast sandwich, for instance, feature famous historical figures such as Michelangelo and Amelia Earhart scoffing at critics who called them crazy right before they went on the change they world. When Apple did something similar two decades ago with its “Think Different” campaign, it was all about somber hero worship. The Chick-Fil-A spots are playing for laughs, depicting Beethoven bragging in song about being the greatest composer of all time, and Thomas Edison gloating about the success of the electric light.
“Their feeling was, especially with breakfast, they needed the work to not look like Chick-Fil-A ads,” Erich says. “The work that we did got people to notice that [Chick-Fil-A had] a [breakfast] part that they didn’t know about, or forgot about, and that there was this new product that they had never heard of and they needed to consider.”
Another example of this line of thinking is borne out in a recent spot for ONEHOPE Wine, a California social enterprise that sells wine and coffee and donates the proceeds to charity. Instead of creating an earnest web ad laying out the emotion behind the philanthropy, Erich and Kallman decided to go funny. They created an arrogant fictional pitchman named Charles Faircloth who has everything from a dinosaur egg he uses as a doorstop in his guest bathroom to a fleet of hovercrafts he’s never even seen, and hawks ONEHOPE to “normal people” as a token gesture of giving back.
“The humor wasn’t part of the brief, but it was to get people to notice the brand,” Erich says. “It’s got very quotable stuff in there. You find yourself quoting what this dude is saying to other people. … It’s just a goofy, fun spot, and they loved it.”
Waxing defiant in the face of Big Data aside, there is another huge trend that Erich & Kallman has working to its advantage: size. A statement by the General Mills COO Michael Fanuele, given after the preferred project partners were named, praised the virtues of bite-size boutiques like Erich & Kallman.
“In looking to round out our roster, we met with dozens of interesting agencies and were wildly impressed by the breadth of talent out there. The industry is teeming with small agencies of every variety doing really powerful work,” he said.
Some might bristle at being called small, but there’s a compelling argument that this is where a lot of the industry is heading, and Erich and Kallman view the descriptor as the cornerstone of their pitch process—which shouldn’t be surprising, considering Erich was part of the team that developed the Small Business Saturday campaign for American Express.
As he sees it, small is lean and nimble in ways the big players can’t be. One of their clients, Gusto, an online HR services platform, reached out to them with a request to put together a campaign at nearbreakneck speed. Six weeks after making the initial contact, the campaign went live on the internet in the form of a series of spots staring actress Kristen Schaal as a deluged human resources managerforced to perform a variety of roles to keep her company running smoothly.
“That would be very difficult at a larger agency. It’s doable, but it’s very much against the normal process,” Erich says. “Our process is very streamlined. We don’t have a lot of people involved. We work with the best talent we can hire. And there’s not a lot that can get in the way.”
Erich & Kallman can respond rapidly in large part because the founders set up the agency to handle a lot of individual project work. With just six employees at the core of the agency, the close-knit group can get on the same page quickly. In boom times, extra work is outsourced to well-established freelancers. “Freelance is stronger than it’s ever been,” Erich says. “It’s arguable there might be more talent outside of agencies than inside of agencies.”
Small is also trustworthy, or at least less suspicious. After the Association of National Advertisers’ bombshell report came out last year alleging that some large agencies were hiding discounts from clients, many brands are wary of how the creative sausage is made.
“Absolutely, agencies are taking a hit. There is a call for more transparency, and it is a hard time to be an agency,” Kallman says. “[With] the most honest, transparent big agency in the world, just because they are that big, there are going to be some doubts [from clients], even if there’s nothing going on.”
Add it all up, and what companies like Chick-Fil-A and General Mills are deciding is that small shops such as Erich & Kallman are a better value for their marketing dollars, which is exactly what Erich suspected heading to the agency-ownership stage of his career.
“There might be an opportunity where an agency that’s billed on project work, that’s billed on speed, that’s very creatively focused and that uses talent that’s out there now might have a place in the market,” Erich says. “We’re not going to steal business from everybody. But we think there might be an opportunity in the marketplace for somebody like us.”
Winning project work from General Mills is a good sign there is. Currently, Erich & Kallman has General Mills CCO Michael Fanuele singing its praises, telling Marketing News, “Obviously Steve and Eric are massive talents, two of the best in the industry, but the entrepreneurial energy of their own agency is turbo-charging that talent with a wide-eyed ambition and ferocious pragmatism. It’s personal for them now—and that’s only good news for the rest of us. Their creative muscle and agile model are sure to deliver treasures for us.”
Recommended For You: