Ask advertising guy David Droga what’s wrong with advertising and you get a blunt answer. “Ninety-ﬁve percent of advertising is pollution,” he says. “It’s seen as an interruption.”
And these days consumers aren’t pardoning interruptions like they used to. The more accustomed they get to being able to control their media environments—chatting up friends on Facebook, time shifting their favourite shows on TV—the less they’re willing to tolerate any intrusion by marketers.
Yet, the plummeting cost of digital advertising, increasingly reduced to a commodity by the profusion of online outlets and mobile devices, has only added to the swarm of pitches facing consumers.
The solution, says 44-year-old Droga, who runs Droga5, the ad industry’s darling of the moment, is “producing work that people actually choose to engage with”. All that technology can be made to work for marketers instead of against them, but only if they’re ﬁlling it with the right messages.
Sales pitch? Absolutely. But it’s working. In this era of tight budgets and digital distrust, Droga is ﬁnding no shortage of takers among the biggest brands in the world.
In the six years since its founding, his Manhattan ﬁrm has built out a client list full of blue chip accounts like Kraft, Prudential, Microsoft, Unilever and Puma. Their collective marketing spending translates into roughly $60 million in revenues for Droga5, mere crumbs in a world where annual global ad spending totals $128 billion, but the ﬁrm’s revenues have nearly doubled over the past year while yielding a proﬁt margin of 20 percent. More important is who Droga5 is attracting. Its most recent win: Coke Zero.
Droga5 exempliﬁes “a new class of agencies that are, if not born and bred in the digital era, then certainly work with digital native types of ideas”, says Dan Salmon, an analyst who covers the industry for BMO Capital Markets. While other agen- cies have melded mobile and social innovations with more traditional approaches, he says, “no one’s taking it to the extent of Droga5”.
But technology is nothing without a philosophy to guide it. “For a long time, advertising got very lazy,” says Droga. “It was built on the fact that if I bombard you enough, you’ll remember my name and you’ll buy my product. Now consumers don’t have to endure that.” Why should they endure any advertising at all? For Droga, it’s because a good ad offers them something of value. That something can be a hilarious piece of content, a fun videogame or a useful app, or it can be an invitation to support a worthwhile cause, a speciality of Droga5’s. “It’s creativity with a purpose,” he says. “Everyone talks about living in a stupider society. I think we live in a smarter society. If you don’t do work that registers with people, they move on much more quickly.”
Droga, who is Australian, came to New York by way of London, where he was named executive creative director of Saatchi & Saatchi when just 29, and then promoted to worldwide creative director of Publicis Groupe, the $10.6 billion holding company. It wasn’t enough for him. “As soon as you get that top job with the big title and the big corner office and the salary, you’re sort of like, is that it?” he says. “I wanted to challenge my principles.”
The name for his new company came from his mother’s habit of labelling her six children’s clothing numerically by birth order when packing them for boarding school. “I ﬁgured if it was my label for nine years, it’s good enough for a business card,” he says.
Droga5 arrived on the scene in 2006, the same year Twitter launched and Facebook opened its doors to non-students. It quickly established its mastery of the new media ecosystem with a video hoax that showed designer Marc Ecko spraying graffiti on Air Force One, one of the ﬁrst instances of viral marketing on YouTube, then only a year-old. The stunt generated so much publicity that the Pentagon issued three separate denials. “Andrews Air Force Base actually went and checked the plane,” Droga chuckles.
That ability to replace brute-force push with viral pull is especially attractive to clients like Puma, a $4.3 billion company battling Nike, a rival 10 times its size. “With social media, if you put the right idea out there you’re going to get people talking about it and wanting to share it,” says Tony Bertone, Puma’s chief marketing officer. “We’re a smaller brand with respect to our competi- tors, so we need to have behaviours like that as part of our budget.”
While Droga5 has had exceptional success creating ads that get treated as content, its attempts at spawning standalone mobile apps and video- games have yielded mixed results.
Altering its approach, last spring Droga5 started De-De, a Soho-based product studio that seeks to blend Silicon Valley’s genius for innovation with Madison Avenue’s marketing savvy. “We’re trying to create new kinds of businesses that technology people can’t do on their own and marketing people haven’t been able to do,” says CEO Hashem Bajwa.
De-De, which stands for Design & Develop, is a separate company but majority owned by Droga5. The arrangement represents an acknowl- edgment by the agency that the po- tential upside of creating a smash hit app goes well beyond generating buzz for an advertiser. While De-De is developing products with an eye towards those that can be useful to Droga5’s clients, it’s hoping to mint a few that can stand on their own.
A social photo app called Night Out, though still in the pipeline, invites comparisons with Instagram and Foursquare. Thunderclap, a service that boosts the effectiveness of messages over social networks, featured prominently in a campaign by Unicef that reached more than 1 billion people in August. More than one outsider has inquired about a sale. “I just want our industry to be less disposable,” says Droga. “I’m not trying to hide the fact that it’s advertising. I’m just trying to make it overt that it’s worth your time.”