March 23, 2023

Advertising: Social Marketing Drives a New York Renaissance

Of late, it seems, New York has been regaining its appeal as a place to be in the ad business after many years of so-called hot shops being started in cities that included Austin, Tex.; Boston; Los Angeles; Miami; Minneapolis, Portland, Ore.; Richmond, Va.; and San Francisco.

A principal reason for the change may be the growing interest among marketers in digital realms like social media, in which agencies in New York — home to Silicon Alley as well as Madison Avenue — are increasingly proficient.

“For agencies our size, the whole area of digital, social and content creation is exploding,” said Steve Laughlin, chief executive at Laughlin Constable, an agency based in Chicago and Milwaukee that expanded to New York in 2009 through a merger with Partners Jeary, which became the New York office of Laughlin Constable.

New York is such “a vibrant market,” Mr. Laughlin said, that he has decided to expand further here by acquiring Filter Advertising, an agency with offices in New York and Red Bank, N.J. As Filter is merged with Laughlin Constable New York to form Laughlin Constable New York/New Jersey, the Filter client roster, which includes CBS Sports Network, Parfums de Coeur and USA Network, is being combined with the Laughlin Constable New York roster of clients like Sterling National Bank and the Lung Cancer Alliance.

“There’s a resurgence of New York, reclaiming the top of the market where we should be,” said Michael Jeary, who led Laughlin Constable New York as president and remains in that post at the merged agency as he is joined by the principals of Filter: JC Addison, Chris Brignola and Jay Sharfstein.

Mr. Jeary recalled being asked recently by a prospective client that often uses stars in its ads for alternatives to conventional endorsement deals, among them “how to activate the extraordinary fan base of celebrities through social media.”

“People are searching for the next bright light, the next creative idea,” he said, and New York ought to be the first place they look.

Mr. Addison, who was president at Filter and becomes executive vice president and managing director at Laughlin Constable New York/New Jersey, said: “The New York market is as good as it’s been in the last five years. People are taking meetings in ways they weren’t not that long ago.”

Mr. Addison also cited the recent arrivals into the market of other agencies based outside New York, among them Frank PR; Goodby, Silverstein Partners, part of the Omnicom Group; and McKinney, owned by Cheil Worldwide.

Those newcomers suggest “there’s business to be had,” Mr. Addison said.

Another reason for the renewed attraction to New York is a perception that it is a hospitable market for agencies that specialize in nontraditional services like experiential marketing, which is centered on offering consumers tangible ways to interact with brands and products that include live events.

“New York is a hotbed,” said Brian Schultz, a partner and chief operating officer at a new experiential agency named Magnetic Collaborative. “You’re surrounded by creativity and culture.”

“The city also offers marketers so many unique ways to engage with the population, whether they want to reach tourists or residents,” he added, suggesting Times Square for the one and Madison Square Park for the other.

The other founding partners of Magnetic Collaborative, which lists among its initial clients Google, HBO, New Balance and Samsung, include Glenn Marck, chief creative officer; Richard Rathe, chief executive; and Geoff Renaud, chief marketing officer. Their résumés include senior posts at R/GA, part of the Interpublic Group of Companies; Radar Entertainment; and the Jack Russell Group, which designs and builds trade-show exhibitions.

“Experiential marketing is critical,” said Josh Rowe, marketing manager for running at New Balance in Boston. “I’d say it’s the most important thing we do, putting a face to our brand advertising, because that’s when you have a real impact with consumers.”

“We want to dial up that engagement, that conversation, with people who buy running sneakers,” he added. “Magnetic laid out some ideas for us on ways we can enhance our presence at events, and we were hooked.”

Being in New York has other benefits, according to Dana Locatell, who has joined with Tim Mack and Zach Merck to open a company called Make, devoted to the creation of short- and long-form content like programs, commercials and video clips for television and the Internet. Make has worked with agencies that include Campbell Ewald, part of Interpublic, and Crispin Porter Bogusky, part of MDC Partners, and is also handling projects like a documentary about Nashville and its music.

“Our scope of talent is all over the country,” said Mr. Locatell, who like his partners worked at before starting Make, “but, truth be told, New York has the access we’re familiar with.”

“In New York, you form relationships with the agencies and the networks that are right around the corner,” he added. “And you’ve got incredible crew talent based here.”

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Media Decoder Blog: Ford Turns to the ‘Crowd’ for New Fiesta Ads

Four years ago, the Ford Motor Company brought out the Ford Fiesta subcompact with an innovative program that recruited young drivers – members of the target audience for the new car – to help introduce it through blogs and other social media. Now, that effort is being expanded into the realm of marketing as Ford plans a crowdsourcing initiative to create advertising for the 2014 Fiesta.

Executives of Ford plan to announce on Tuesday morning, at a session of Social Media Week in New York, that they intend to recruit 100 socially-connected consumers to produce a year’s worth of advertising for the next Fiesta, which would begin appearing in the spring.

Information about the initiative will be available on a special Web site,

The would-be Madison Avenue ad executives will be asked to create video clips that could serve as commercials, on television or online; digital ads; ads for social media like Facebook and YouTube; and even ads for magazines and newspapers.

Crowdsourcing as a way to create advertising has been a popular trend for several years as marketers seek to take advantage of new technologies to forge closer ties with consumers.

Ads created by consumers have even appeared in high-profile venues that include the Super Bowl, for brands like Doritos and Mennen Speed Stick, and during episodes of “American Idol,” where Coca-Cola ran one such commercial, with a Valentine’s Day theme, on Thursday.

Automotive brands have also taken part in the trend, among them the Chevrolet division of General Motors, which ran a crowdsourced commercial during Super Bowl XLVI last year.

But looking to nonprofessionals to come up with a year’s worth of ads is unusual, if not unique. “This is Ford’s first completely user-generated campaign,” said James Farley of Ford.

Although “there are some risks,” Mr. Farley acknowledged in a phone interview last week, he likened the experiment to the leap that marketers took decades ago with a new medium called television.

“There are new rules, new things to learn about,” said Mr. Farley, who is executive vice president for global marketing, sales and service and Lincoln.

For instance, Mr. Farley said, “if you ask people to help you produce advertising, they expect to see what they do without a lot of filters.”

“You have to be extremely careful about providing too much help,” he added.

That was a lesson Ford Motor learned in 2009, Mr. Farley said, when the company introduced the Fiesta by giving cars to 100 young men and women and asking them to share their experiences on blogs, Facebook, Twitter and YouTube.

“We had a traditional ad campaign, and we had a digital ad campaign we created with them,” he said, and the latter ads were “a little overdeveloped; they sounded like a company trying to be young.”

This time around, for what the company is calling Fiesta Movement: A Social Remix, 100 young men and women will be lent cars, this time the 2014 model. Some will be alumni of the Fiesta introduction, some will be new recruits and some will be celebrities.

Just like the original version of the Fiesta Movement, the drivers of the cars will be supplied with gasoline, insurance coverage and equipment like cameras, then asked to complete tasks (“missions” in Ford parlance) that involve the cars.

And just like last time, the participants will be asked to share their experiences in social media. But this time, the content they create will also be the basis for Fiesta ads in other media.

Although there will be “zero” professionally-produced ads for the 2014 Fiesta, Mr. Farley said, that does not mean the ads will be of less than professional quality.

“We’re going to shape them to be a Ford Fiesta message, not just ‘We’re having fun on the dime of a big company,’ ” he added.

As for the professionals at the advertising agencies that work with Ford, among them units of WPP like Team Detroit and Hudson Rouge, cry not for them. They will continue to create campaigns for other Ford and Lincoln models.

Mr. Farley declined to discuss what the company would spend on ads to be based on what will be created by the participants in the next installment of the Fiesta Movement. But, he said, the money saved on production costs might be added to the budget.

During 2010, the first full year of introductory advertising for Fiesta, Ford spent $102.9 million in major media to promote the car, according to the Kantar Media unit of WPP. Ad spending fell to $42.8 million in 2011.

During the first nine months of 2012, ad spending totaled only $2.1 million, compared with $40.7 million during the same period of 2011. The decline reflects Ford’s intent to ramp up spending again in 2013 to promote the major changes in Fiesta for the 2014 model.

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Advertising: Super Bowl Ad Previews Draw Online Attention, With Criticism

Still, he is disappointed that consumers can already watch an extended version of the commercial online, in stark contrast to a decades-old strategy of building anticipation for Super Bowl spots by keeping them under wraps until the game.

“I’m more of the old school; I like the element of surprise,” Mr. Norman said. “If I ruled the world, I’d go back to holding out and waiting.”

His client, the PepsiCo Beverages division of PepsiCo, which makes Pepsi Next, sees it differently. The company is among a long list of Super Bowl sponsors jumping the gun by sharing commercials — shorter versions, longer versions or the versions that will appear on Sunday — hours, days or even weeks before the game.

“The world has changed,” said Angelique Krembs, vice president for marketing for the Pepsi trademark at PepsiCo Beverages. “The conversation used to happen after the game. Now, enabled by social media, there’s a lot of conversation before the game about what’s coming up, and we want to be the most talked-about brand in that conversation.”

The willingness of consumers to watch ads on social media like Facebook, Twitter and YouTube — and to discuss and share them with friends and family — is rewriting the Super Bowl playbook for Madison Avenue. Marketers and agencies are deciding that it’s better to give up the benefits of surprising viewers during the game in favor of gaining additional attention before.

“We don’t see any down side” to forgoing the “aha!” moment during the game, said Scott Campbell, general manager for integrated marketing communications at Colgate-Palmolive, which bought a Super Bowl commercial for its Mennen Speed Stick deodorant and uploaded the spot to the brand’s YouTube channel on Wednesday.

“I don’t think we’ll get 110 million viewers before the game,” Mr. Campbell said, referring to the number of people expected to watch the Super Bowl, “but whatever we get by giving it to our online community is all to the plus.”

Another reason Colgate-Palmolive released the commercial early on social media was that it is part of “a campaign that was social from the get-go,” he said. The campaign began with a contest on Twitter, and the commercial was produced through Tongal, a company that uses a crowdsourcing model to develop creative ideas for ads.

To be sure, priming the pump before a Super Bowl spot runs does not guarantee success.

“Pre-announcements can build up hype, but if the ad isn’t seen as dynamic, innovative or exciting, I don’t think the sneak peeks work,” said George R. Cook, executive professor of marketing and psychology at the Simon Graduate School of Business at the University of Rochester. “There may not be so much ‘wow’ or positive bounce.”

Another risk, Professor Cook said, is that “the message can wear out” before the game, lowering the return on the large investment in a Super Bowl campaign. CBS, which is broadcasting Super Bowl XLVII, is charging an estimated $3.7 million to $3.8 million for 30 seconds of commercial time, with some going for $4 million.

Opening the kimono before Super Bowl Sunday may also backfire if consumers dislike what they see. For instance, Volkswagen of America has been fending off negative responses to its Super Bowl ad since previews began online on Monday.

The Volkswagen spot features an actor playing a white Minnesotan who speaks with a lilting “Yah, mon” Jamaican accent, meant to encourage drivers to “get happy.” The commercial, by Deutsch L.A., has been denounced as culturally insensitive or racist.

“We didn’t go in saying, ‘Could there be a backlash?’ ” said Tim Mahoney, chief marketing officer at Volkswagen of America, because testing showed that the ad conveyed “the message we want to deliver, that this is a brand that can put a smile on your face.”

“I’m pretty pleased that within 24 hours we had 1.1 million people watch the spot” on YouTube, Mr. Mahoney said. That figure had grown to more than 2.1 million Wednesday night, and despite the criticism, he said, reactions have been “overwhelmingly positive.”

The additional time to scrutinize the contents of Super Bowl commercials also means a much earlier start to the postgame tradition of challenging the ad industry’s creativity by pointing out all of the spots that echo one another. For example, several commercials, including Pepsi Next’s, will promote free coupons and other giveaways.

And at least two commercials, for E*Trade and Kia, include images of baby astronauts, while a third, for the new Axe Apollo line of products, sold by Unilever, features a young male astronaut.

Matthew McCarthy, senior director of brand development for Axe North America at Unilever, said he was undaunted by pregame comparisons. “Do I hope having assets out there before the Super Bowl generates buzz?” he said. “Of course I’d like that.” The Axe Apollo commercial was created by Bartle Bogle Hegarty.

As for E*Trade, “luckily, our spot has only one second” of a baby astronaut amid a variety of images, said Tor Myhren, president and chief creative officer at Grey New York, which creates E*Trade’s ads.

The commercial, scheduled for social media on Friday, features the “talking” E*Trade baby advising investors not to waste money on 401(k) fees. In addition to visiting space, the baby indulges in pursuits like playing polo and drinking — milk — at a nightclub.

“I have mixed emotions about running Super Bowl spots early,” Mr. Myhren said, because it dilutes the appeal of the game as “America’s last campfire, where everyone gets together to watch the same thing at the same time.”

Even so, “you spend a lot of money on a 30-second commercial in the Super Bowl,” he said. “You may be a fool not to leverage the opportunities.”

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After Hurricane Sandy, Businesses Try to Restore Service

In fits and starts, businesses across a broad swath of the East Coast struggled to recover on Tuesday from Hurricane Sandy, even as executives conceded that it would be days, at least, before things returned to normal.

Manufacturers like Mr. Selldorff’s company, Legrand, a maker of electrical equipment, were among the hardest hit, with normal production not expected to resume in Fairfield until early next week.

In New York City, banks and other financial services firms predicted that they would be mostly back on their feet when financial markets reopened Wednesday and customers began to venture out to local branches.

JPMorgan Chase’s headquarters on Park Avenue and its principal trading floors a few blocks north on Madison Avenue are set to reopen Wednesday, as are at least 100 hub bank branches in New York, New Jersey and Connecticut that were stocked with extra cash before the storm.

“I think power in New York City will be a challenge,” said Frank J. Bisignano, co-chief operating officer of JPMorgan Chase. “We’re not talking about weeks, but we are talking about more than a day.”

For many companies, as for individuals, the big question mark was when power providers and other utilities would be functioning reliably again.

More than five million households in New York, New Jersey and Connecticut were without power Tuesday afternoon, as utilities worked to repair downed lines.

Like the power companies, Verizon Communications, the largest wireline phone provider in New York, was hit hard.

On Monday night, the company posted a photo of the first floor of its office at 140 West Street in Lower Manhattan, which had been flooded with three feet of water. Bill Kula, a spokesman, said the storm surge from the hurricane flooded Verizon’s central offices in Lower Manhattan, Queens and Long Island, causing power failures.

In some cases, even its backup power systems failed, leading to the loss of voice, Internet and television services in those areas.

Mr. Kula said the company would have to work with the power companies to pump water out from underground and dry off equipment. He added that many Verizon employees were working from home or from other offices, and that many workers from elsewhere had been rushed to New York to help with the restoration efforts.

“It couldn’t have happened in a more challenging location, in the largest city where we provide wireline services, but it’s not unprecedented for us to have to undergo herculean efforts to restore service,” Mr. Kula said.

He added that a priority for Verizon was the financial district, where it is the primary wireline provider, affecting many businesses. “We have crews working around the clock to do everything we can to ensure the financial district is fully up and running,” he said.

At JPMorgan Chase, about 25,000 employees worked remotely on Monday, but that figure dropped to 15,000 to 20,000 on Tuesday as lights went out across the region.

On a typical day, about 2,000 to 3,000 employees work through the bank’s remote computer system.

Some retailers, like Ace Hardware, rushed to reopen stores and stock them with everything from extra batteries to mops and cleaning supplies, said John Venhuizen, the company’s president and chief operating officer. Of Ace’s 500 stores in the region directly affected by the storm, about 450 managed to open on Tuesday.

All told, the lost output from and overall effects of the storm could shave as much as 0.6 percentage points off annualized fourth-quarter economic growth, according to an analysis by IHS Global Insight.

Some sectors, like fuel providers, seemed to have escaped the worst of Hurricane Sandy’s wrath. As technicians returned to some idled refineries, their early reports suggested that regional gasoline and fuel supplies would not be seriously affected by the storm.

Reporting was contributed by Reed Abelson, Brian X. Chen and Katie Thomas in New York, Clifford Krauss in Houston and Bill Vlasic in Detroit.

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