November 23, 2003
By Kelly Pate Dwyer
Denver Post Business Writer
A young Denver entrepreneur is creating buzz in advertising circles
by turning a profit from junked TV commercials.
Kevin Schaff recycles ads that cost anywhere from $50,000 to more
than $1 million to produce, pitching them on the cheap to small
businesses that can't afford the costly brainstorming, writing,
filming, actors and editing that original productions require.
Schaff's company, Thought Equity, gives small companies access
to top creative talent without the hefty price tag, but experts
say the new ground Schaff is plowing is fraught with risk.
Thought Equity wipes the ads of all product and company references
and resells them, typically for less than $10,000. Schaff is young
- 29 - but he's no rookie. He started his first ad agency as a 19-year-old
University of Wyoming student looking for something to put on his
Most agencies that send Schaff commercials insist their names never
be used because their original clients paid dearly for the original
work. And the fact that Thought Equity is copying on the cheap raises
legal questions, Advertising Age magazine editor Hoag Levins said.
But Schaff argues that he's serving a market that could otherwise
only dream of TV - the most expensive and, in some cases, most prestigious
place to sell your wares. And he said he buys the rights to what
"We're finding a market of people with $5,000 to $8,000 (budgets)
that nobody wants to take on," Schaff said. Companies need to advertise
on a local and regional basis, said Bart Cleveland, director of
creativity for Sawyer Riley Compton, an Atlanta-based advertising
firm. Thought Equity "gives businesses a central place to go," Cleveland
said. As for the lack of originality, he said, "In our business,
there is nothing new truly. We look at what life is and think of
new applications for it." What differentiates Schaff's catalog of
ads from typical stock footage and image companies is that Thought
Equity sells an entire commercial, not just clips or pictures, and
Schaff works across all industries, Cleveland said.
Sawyer Riley Compton, whose clients include Philips Electronics,
Dow Chemical and the Ritz-Carlton Hotel Co., has sent 12 ads to
Thought Equity, including "Kung Fu," a humorous spot created for
the Atlanta Ballet. The ballet wanted to lure a younger audience.
But some board members frowned on the ad, which shows two young
slackers faking kung fu fighting in their living room, so the ad
went straight into the drawer. Two years later, a school for diesel
auto repair and refinishing brought the spot back to life.
WyoTech, which has a campus in Laramie, bought exclusive rights
to air the ad locally. The Atlanta and Laramie versions are exactly
the same, except for the ending. Kung Fu opens with two guys slouched
in front of the TV. A commercial comes on and they're up and doing
their own Jackie Chan riff, in slow motion, complete with sound
effects. It ends when one guy leaps over the other, lands on the
coffee table, which crashes to the floor. "Too much free time?"
says the voice over. "Go see the ballet." The new version: "Everyone
has skills. Some earn money. Enroll at WyoTech."
"I actually think the ad is more appropriate for WyoTech than the
Atlanta Ballet," Cleveland said. He declined to discuss what money
changed hands but said Sawyer Riley shared its take on the resale
of Kung Fu with the Atlanta Ballet. Thought Equity started recycling
print ads two years ago. The firm has amassed a library of more
than 6,000 ads, including more than 1,000 TV commercials, from 300
advertising firms and production companies nationwide, Schaff said.
Thought Equity has recycled 25 of those commercials across the
country since launching the TV side of its business this fall. To
drum up fresh users for his ads, Schaff is going straight to where
the need is - broadcast and cable-TV companies struggling for local
Salesmen such as Comcast's Dave McGrath see Thought Equity as a
sales tool. "It's one of those 'What a great idea, why didn't I
think of it?"' said McGrath, who manages sales for Comcast in northern
Colorado. Producing original ads takes time - too much time for
some companies that want on the air now, McGrath said. "To have
the ability to go in and from an initial meeting with clients, talk
concept and show something that may fit them is an awesome tool
to have," he said. "The basic guts of the ad stays as is, and we
go ahead and tag it and put in licensed music beds, and we're off
to the races."
McGrath hooked a construction company up with Thought Equity, which
helped him close the sale. Third-party distributors are also selling
Thought Equity's ads through cold calls to small businesses, such
as Denver-based GolfTEC Inc. Hospitals, banks and mortgage companies
are also clients.
But with so many parties involved, critics worry that someone will
get burned. Sometimes the rights belong to an agency; other times
it's a production house or the original company for whom the ad
was created. "Where does freedom of domain begin and the stuff that's
proprietary end? It's a really tricky gray zone," AdAge's Levins
said. "Anytime anyone has copyrighted material someone else uses
without their full knowledge and sign-off, you have a problem."
Thought Equity gets agreement from any and all parties to get exclusive
worldwide distribution rights, Schaff said. Thought Equity also
doesn't use ads featuring actors who belong to the Screen Actors
Regardless of legal hurdles, Levins casts doubt on Thought Equity's
growth potential. "I think lot of clients, except for the smallest,
might have a hard time seeing their ads cloned around the country,"
Levins said. "The key is how many clients are small enough and isolated
enough and sophisticated enough to know they are isolated and still
be willing to do this?"