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For Sale: One Ad, Slightly Used

Monday, May 10, 2004


For three months last year, viewers of local cable in Atlanta saw an ad in which a man pushes his face flat in a mirror to simulate the effect of acceleration. He's dreaming of how it will feel to race in his BMW once it's been customized by local shop Harrison Motorsports. Earlier this month, that same ad was reborn in Las Vegas-area movie theaters, this time with the reference to the car shop removed and a stock photo of a Hummer tacked on at the end, along with Budget Rent a Car's tagline.

Brian Singleton, marketing director for Budget's Las Vegas franchise, was happy to have the hand-me-down content. It cost him $1,200 to license, a fraction of what Atlanta agency Sawyer Riley Compton spent to produce the spot. "I never would have been able to afford this kind of quality otherwise," says Singleton.

Recycling ad content may seem like a no-brainer. Modest-size regional businesses would surely love the chance to pick up high-quality, low-cost television commercials. At the same time, ad agencies would be happy to earn some extra money for content that has run only in one region or that was produced on spec and never sold.

Connecting this market with this resource is the idea behind 1-year-old Thought Equity, a Denver company with an archive of 1,200 commercial clips that regional media outlets can sell to local advertisers. "There's got to be billions of dollars of unused creative out there," says CEO Kevin Schaff. "It doesn't make any sense for all that value to be gathering dust in a filing cabinet."

But applying a thrift-store model to creativity is not all that simple. Content has to be generic enough to appeal to a second-time-around client and can easily start to look dated after a while in the vault. And if a client commissioned the original ad, that marketer has to be willing to see it licensed elsewhere. When the idea was tried before with a company called Admine, the experiment lasted just two years.

Thought Equity, in fact, has its roots in Admine, which shut down in January 2001 despite boasting a board of directors that included Cliff Freeman's Arthur Bijur and The Martin Agency's John Adams. In that case, collecting the content proved too costly, says Mark Ein, CEO of Venturehouse Group, a venture-capital firm that invested in both companies. "Admine did a good job of gathering content and creating customer interest, but it was spending too much money too fast," he explains. "Thought Equity is taking a more conservative approach."

About a third of the company's database originally belonged to Admine, and Thought Equity uses Admine's infrastructure to deliver some of its content. Thought Equity acts as a middleman, sending 40 percent of its licensing fees to the owner of the original content.

Another problem Admine encountered was the reluctance of potential clients to log on to its site to sift through content. In contrast, Thought Equity sells its content through partnerships with six media companies that comprise 122 local outlets. The partners, which include cable giant Comcast and theater chain Regal Cinemedia, can use the recycled commercials to help motivate clients to buy advertising, or they can charge advertisers an add-on fee for use of the content. Thought Equity provides training on using the database, checks to make sure that no ads are sold twice into the same designated market area and handles royalty payments.

Sawyer Riley Compton, a $50 million shop, so far has seen a few of its commercials recycled through Thought Equity. The spot for Harrison Motorsports was produced "to spotlight the talents of the agency," explains creative director Bart Cleveland, and was provided to the client at "a substantial discount." (Client general manager David Harrison says he got the spot for free.) Cleveland says the possibility of reselling the commercial through Thought Equity helped prompt the agency to make the ad. "We definitely had it in the back of our mind, and it lowered our risk," he says.

After Cleveland submitted it to Thought Equity, the company screened the ad to determine whether it had resale value and whether any legal restrictions would prevent relicensing the content. "We felt that the concept had a potentially broad applicability to the automotive industry," says Schaff. References to the BMW shop were then removed by Ridge Creative, a Laramie, Wyo., shop owned by Thought Equity that provides video-editing services and also helps Thought Equity clients with production needs.

The Las Vegas franchise of Budget, meanwhile, had approached Regal Cinemedia, expressing interest in running an ad in its theaters. Tim Coury, who sells pre-movie ad time for Regal in the Las Vegas area, suggested the erstwhile BMW commercial could be perfect for promoting Budget's exotic rentals, such as Hummers and Jaguars. (The Budget franchise normally doles out ad assignments to local shops on a project basis.)

Since moviegoers judge live action on the big screen in comparison to the movie, "the ability to get high-quality commercial content is key in my sales efforts," Coury says. Singleton secured the Las Vegas DMA rights to the commercial, and Ridge Creative added the stock photo and new tagline.

This scenario is fairly typical, according to Schaff, with an ad shifting between clients in the same category but based in different cities. Sometimes, however, recycled ads wander far afield from their original purpose.

Sawyer Riley Compton created a pro-bono spot for the Atlanta Ballet that took an unconventional route: It showed two goofy college-aged guys in a backyard, trying to emulate professional wrestlers. The tagline was, "Too much free time? Go see the ballet." It proved too "controversial," says Cleveland, and the client pulled the spot after two weeks.

With the Ballet's approval, Sawyer submitted the work to Thought Equity, where it sold, through Comcast, to WyoTech, a Wyoming-based automotive-repair school. The tagline became, "Everyone has skills. Some make money. Enroll at WyoTech."

Thought Equity's database also includes content that was produced for personal portfolios rather than for clients. For example, Los Angeles-based director Elyse Lewin spent $30,000 of her own money to shoot a demo commercial showing children speculating about their new neighbors, with the final child asking a wryly adult-sounding question about mortgage rates. The ad sold, again through Comcast, to Wyoming Financial Group, a bank that wanted to promote its regional mortgage services. "It was nice to get some money for work that I had originally done merely to show my talents," says Lewin, who got a check for $1,000.

While ready-made content fits right in with the needs of some clients, it may be a tough sell for many. In the 1980s, the Carden-Cherry agency in Nashville, Tenn., created commercials in which Jim Varney's Earnest character touted some 3,000 different regional products and business in his backwoods Southern accent. Each ad started with his greeting to his neighbor, "Hey! Vern," and ended with "Know what I mean?" But examples of that type of one-size-fits-all approach are rare.

"This kind of advertising is only viable for small clients who can't afford a production budget," says David Baldwin, creative director at McKinney + Silver in Raleigh, N.C. Given the limited appeal of recycled content, he says, "there just isn't all that much money to be had."

Schaff, 31, former president of product-launch firm Wind River Communications, has no hard data on the potential of his market and says he's thinking about funding a market study.

Another problem facing Thought Equity is the availability of quality ads and the willingness of the original client to approve the ad for reuse. Many clients are unlikely to want to see even rejected work licensed to potential competitors—all the examples of ad reuse that Schaff provided originated with small and midsize agencies trying to break into new markets. And three-figure royalty payments are unlikely to motivate agencies to contribute ads.

Schaff says he has received content from 386 providers, ranging "from $100,000-a-year freelancers up to $50 billion-a-year multinational ad agencies," but he would not disclose the names of any large agencies participating, citing confidentiality concerns. Adams, chairman and CEO of The Martin Agency, says his shop submitted commercials to Admine, content that has since landed in Thought Equity's database but has not sold. "We had some stuff in there, but we never saw any revenue from it," he says.

"Admine purchased content from a wide range of agencies," adds former Admine executive Bill Replogle. Thought Equity shares distribution rights for Admine content with Vienna, Va.-based ProAd Group (an outfit that also does traditional advertising and marketing), whose CEO, Dave Dolton, claims much of that material is outdated and usable only as period-piece stock footage.

Both Dolton and Schaff, however, claim to be wildly optimistic about the potential for reusable ads. "It's too early to tell, but the market has tremendous legs," says Dolton, who expects to have 3,500 pieces of content within a year. Says Schaff: "We are creating an entire industry shift in advertising that empowers reuse versus re-creation."


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