“Where Enfatico Went Wrong, and What It Taught” by Rupal Parekh, Advertising Age

Custom Dell Agency Was Folded Into Y&R, but This Model Can Still Work

Published April 20, 2009

NEW YORK (AdAge.com) — Although WPP’s custom-built agency for Dell never got off the ground before it was folded into sibling shop Y&R this month, that doesn’t mean a marketing structure built for a single client can’t work.

Consider for a second the relationship between TBWA’s Media Arts Lab and its sole client, Apple. The Omnicom agency’s dedicated offering to the hallowed electronics brand hasn’t just endured, it’s thrived. While its staffers may be cooped up in digs a half-block away from TBWA’s main Playa Del Rey, Calif., offices, and they’re probably as tired of Justin Long as anyone else, you don’t hear them complaining.

So what went wrong with Enfatico, and what can the agency community take away from it? The main lesson is that if you are going to attempt this model, it can work — provided it’s not overambitious and a lot of things are properly aligned.

Enfatico’s rapid demise as a stand-alone shop had a lot of causes, including a big one it could do nothing about: a global economic meltdown that left an environment inhospitable to these kinds of experiments. Dell’s business, of course, met with great challenges and, on the agency side, it’s difficult to justify the construction of yet another global ad agency network — especially when parent WPP already has four of those.

“Sometimes it can be purely a client’s vanity to have their own agency, built from scratch, but often times, the idea and the motivation is sound,” said Ken Robinson, principal in New York with consultancy Ark Advisors. “The client is saying ‘I want you to eat, sleep and breathe the brand.'”

Overhead investment
But as WPP knows, you don’t need a built-from-scratch agency to properly service a complex client. It — and its rival holding companies — have a history of assembling teams pulled from multiple agencies to service a single client. HSBC, a WPP client since 2004, is a classic case of this. While these constructions can be disruptive to already existing agency brands, they don’t require the overhead investment an Enfatico-type experiment does.

It also helps if the agency’s relationship goes up to the CEO, as does TBWA’s with Apple. The CMO is, these days, a relatively transient role with ever-shortening average tenures. It’s hard to justify a long-term commitment of the kind Enfatico entailed when you can’t be sure your agency’s advocates will still be at the company two years from launch. Case in point: Mark Jarvis and Casey Jones, the Dell marketers who asked for the agency concept that would become Enfatico, were both gone from Dell a year after the agency was founded.

Then there’s the talent issue. As any recruiter will tell you, it’s not easy attracting top-notch talent to a shop that’s focus is just one client, and keeping good talent in such an insular culture is even harder — so there have to be measures that allow for some variety.

“The benefit is that it’s probably more cost-effective when a client works with a single agency, but the thing about advertising and marketing communications isn’t just about cost — it’s about value for the cost,” said consultant Arthur Anderson. “The biggest limitation of a single-client agency is that agency creatives and strategists like to be stimulated by the issues that exist in agencies that have multiple clients.

“There are exceptions, and those are marketers that have such great products and variety that it could induce the brightest and best to want to join that agency [structure]-but 1 out of 100 that are that super,” said another ad industry consultant. “Apple is special … It’s one of the greatest clients in the world, and Dell is not the same caliber of brand. The other thing to keep in mind is that the Apple-TBWA thing is kept relatively quiet … they don’t ever go screaming from the rafters about it.”

That loudness was definitely a problem for Enfatico, which came screaming into the world on bold proclamations.

‘A lot of noise’
As one ad executive familiar with the agency put it: “They came out of the starting gate with this announcement that they are going to reinvent the modern agency of the future, so that was a little braggadocio and opened them up for criticism.” Add to that the fact that “they had a groundswell of disgruntled [former Dell] agencies, and a lot of noise and negativism in the blogosphere.”

Those sorts of boasts only bring greater scrutiny — and, when failures happen, large heaps of schadenfreude come with it. Enfatico’s every move was followed closely — as it should have been — but what was unusual was the degree of vitriol and glee attached to all of its failings, however minor. The agency did manage to scale up to its promised size, get some work out the door for Dell, pick up an additional client in Progress Software and managed to hit the finals in another pitch for Vonage against revered creative networks like TBWA and Saatchi & Saatchi — albeit all later than expected.

“Experiments like Enfatico can take time and are not all doomed … there needs to be more risk-taking in the agency world,” said Mr. Anderson, calling the recent move a “necessary change.”

Despite the Enfatico flameout, it’s a safe bet that agencies will still try to create one-shop shops for marketers.

DDB’s new unit, DDB Entertainment, was built solely to handle new client Blockbuster’s needs — and, furthermore, many industry observers predict the trend will only ramp up in the current economy.

As marketers look to stretch their smaller marketing budgets and squeeze more efficiencies from agencies, more companies are expected to seek solutions that bring all of the various parts of their marketing program together under one roof.


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