CAPITAL IDEAS
By PAUL-MARK RENDON
Amid swift social change that's taking
marketers from impressions to interactions, Capital C is Marketing's
2006 AGENCY OF THE YEAR for incubating new brands, developing
non-traditional marketing efforts and evolving from a shop that simply
creates promotions, to one that promotes creations
2006 Agency of the Year: Capital C
THE CAPITAL C PARTNERS (L-R): Tom Clune, Matthew Diamond, Vickie
Calverley, Tony Chapman, Paul Quigley, Glenn Chilton, Bennett Klein
Tony Chapman has a bit of a cold, but it's tough to notice unless he raises his voice. "I'll be fine," he says. "I better be." Walking briskly along Toronto's King Street East on a sunny fall afternoon, the 50-year-old, scruffy chic CEO of Toronto's Capital C agency is on his way to give a pep talk to Pfizer's marketing team.
It's a presentation he's given umpteen times to a number of marketers this year, complete with an accompanying slide show, perfectly choreographed transitions and persuasive stats that illustrate points he knows well enough to recite in his sleep.
He'll ask you if you have a PVR and tell you that, when he was a kid, he would go home after school and watch Hogan's Heroes. He'll tell you that, nowadays, consumers are spending their time much differently. They're designing their own MySpace pages or publishing their own books or creating digital animation that would beat Disney's best work just 15 years ago.
He'll point out how only 41% of teenagers choose a face-to-face breakup over a quick and painless text message-even when they're sitting next to each other. Amusing, except when you consider the marketing consequences of all the new behaviour. "The more time they spend with a mouse," he'll say, pausing for effect, "the less they leave the house, and the less they connect to mass media."
This, of course, is where an agency like Capital C comes in. Amid turbulent social change in which marketers have been forced to go from impressions to interactions-as Chapman says, from "males age 18-to-29" to "jsmith@ yahoo.com"-and from carpet-bombing their messages to more surgical communication, Cap C has cast itself as an agency of the new era. It's the central reason why Marketing has named it 2006 Agency of the Year.
The numbers prove it's a direction other agencies will want to follow. Stats from sources including Universal McCann's Coen Report, the 2004 Promo Industry Trends Report and the Direct Marketing Association, indicate that of the $600 billion spent on marketing in 2004, more than two-thirds, $423 billion, was spent on anything but advertising.
And that's exactly where you'll find Capital C. Last year, it acquired a 50% stake in P2P, a Montreal experiential marketing company. It also picked up Toronto-based database marketing expert Kenna Group, giving it the infrastructure to develop those highly targeted marketing campaigns that Chapman says will be commonplace in the future.
What's most interesting, though, is that 14-year-old Capital C, an agency that made its name as a promotional marketing expert, has gone from simply creating promos to promoting creations. The shop has managed to convince marketers to let it build new brands from scratch, or overhaul existing ones that need renovations, and pull off some crazy-enough-to-work ideas in the process.
For vintner Andrew Peller Limited of Grimsby, Ont., Cap C came up with
a new brand of wine called XOXO, which launched in August and is
targeted less at stodgy wine snobs and more at women who simply want
good wine for Girls Night In.
Cap C, under the watch of creative director Bennett Klein, came up with original ideas like borrowing iconography cues from the luxury fragrance world and signing a spokesperson deal with model-turned actress Tricia Helfer. Cap C even shaped the way XOXO looks in-store, with full-colour box shippers that, when stacked, spell out the brand's name and practically scream out at anyone browsing down the aisle. In its first four weeks in-market, 36,000 bottles were shipped out, says Terry Sauriol, Peller's director of marketing, putting XOXO on track to becoming a Canadian top 10 wine by next year. In-store conversion samplings, he adds, are running between 35% and 50%. "Usually, if you get 15% to 20% you'd be pleased," he says.
"I called around to a couple people, to gauge who they thought would be good to help us develop a new brand package," Sauriol recalls. "Everyone said 'you gotta go to Cap C.' "
Part of the reason for that vigorous support, says Dale Hooper, director of brand marketing at Frito Lay Canada, is Cap C's ideation process, one in which no goal is too big. Hooper still gets excited by an idea Cap C came up with for Lay's potato chips to find Canada's greatest hockey fan-and then induct him or her into the Hockey Hall of Fame. "And we did it!" exclaims Hooper, still somewhat incredulously. The winner, Mike Brideau of North Bay, Ont., was honoured in a ceremony this fall. For next to nothing, the contest got approximately 18 million media impressions, Hooper says.
While Cap C is getting used to incubating new brands and developing non-traditional marketing efforts, the agency will still have a hard time shaking its promo handle. It won three golds at the 2006 Promo! Awards for its work with Unilever and Microsoft. For Unilever's ThermaSilk hair care brand, it created the "Hit on my Hot Guy" website that allowed visitors to play virtual dress-up with images of their ideal men. Average time spent on the site was a whopping 53 minutes, whereas comparable sites might be happy getting people to stay for 10. "They're just at the top of their game," says one Toronto marketing executive, who says he appreciates the shop's leadership depth, with savvy partners like vice-president, general manager Tom Clune, CFO Vickie Calverley and managing director Matthew Diamond.
Still, Cap C has had its share of stumbles. Chapman is blunt about the company's failed attempt to start a public relations division two years ago, which perhaps was doomed since most of Cap C's clients already had their own PR outfits. "We got greedy," he says. And little known is the fact that Cap C helped develop the concept for Kraft Hockeyville, the CBC reality series that sought Canada's most diehard hockey town. Chapman says the agency failed to show Kraft how it would execute in-store, and the two sides went in different directions.
Despite that, the company has made enough waves to land project work for McDonald's headquarters in Chicago and a new North American assignment for ICI Paints in Cleveland, Ohio. Ditto a new assignment for RBC Financial Group in Toronto. The agency, with about 85 full-timers, is moving to a bigger space to accommodate its growing staff. Revenues, which were just $1.75 million in 1999, totalled $16 million in 2005 and are expected to hit $25 million this year.
Back on King Street, Chapman talks as he walks to the Pfizer off-site. Over the years, he's managed to distill his rules for selling (solutions, not sales; value, not price). He learned a lot about business from his mother, who set him up with a lemonade stand when he was a kid. In mid-stride, he points at a storefront display of picture frames. "Things like those," he says. "I could never sell. I like selling ideas. I like selling the intangible, and then watching it become something real."
And his idea of an agency for a new marketing era has become reality, too.
