Why creative agencies are playing the brand ownership game-and scoring with clients.

Launching a successful tea brand in the UK, a saturated tea market, helps Elmwood showcase its brand strategy and design expertise.

By Natalie Woodhead

In 2007, global branding and design consultancy Elmwood launched its own tea brand, Make Mine a Builders. It all began when someone in the studio asked who wanted tea and someone else replied “Make mine a builders” (shorthand for a strong, hot tea with milk). At the time, the British tea market was flooded with fancy herbal teas so the moment felt right for.

“Launching a new brand in one of the world’s most mature, competitive markets was a bold move,” says Eliot Schreiber, Elmwood’s global president. “Once we’d spotted a market opportunity, we decided to show our clients that we’re willing to put our money where our mouth is by applying our brand strategy and design expertise to our own project. And in so doing, gain a better appreciation of what our clients face when creating and growing brands.”

For authenticity’s sake, Elmwood taste-tested the blend with a panel of 300 builders (British construction workers are traditionally big tea drinkers), created a partnership with the Federation of Master Builders-the UK’s largest building trade association-and forged novel distribution channels for the brand, including a national hardware store.

But it wasn’t all a bed of roses. “Dealing with supply-side problems, such as droughts in Kenya that inflated tea prices, a fire at our printer’s, and delisting from a chain retail account, made the initiative very real, very fast,” Schreiber says. “But we hung in, won back the account, added new ones and now sell millions of mugs of tea annually throughout the UK.

Agency-created brands are, in effect, challenger brands. Amsterdam-based They shook the global champagne market up with the debut of Zarb, a sexy everyday brand.

Walking the Talk

Other consultancies that have successfully invested  in their own ideas include the Amsterdam agency, They, which has shaken up the champagne world with its sexy, arty champagne brand, Zarb; and The Brooklyn Brothers, with their famous Fat Pig chocolate. Paul Parton, partner at The Brooklyn Brothers, explains that the motivation was simply to create what they couldn’t find. “We love chocolate. And at the time it was very hard to find organic milk chocolate that wasn’t truffled or full of nuts,” he says. “So, in the absence of an alternative, we thought we’d make our own.”

And why not? Ad, branding and design agencies know better than most about creating and positioning brands and products. But as Elmwood’s example illustrates, there will always be hurdles along the way. So why would creative agencies dirty their hands in the day-to-day grind when they could just dream up the strategy, positioning and creative, then move on to the next client? Is it really all worth it?

In a word, yes. Proving they can practice what they preach while growing their understanding of clients’ challenges is just one slice of the pie. The worsening economy and tightening client budgets means launching own brands and products makes financial sense too.

If they’re successful, it’s one more defense against the effects of the recession. And when squeezed budgets so often mean muted creativity, it’s also a way of maintaining creative flow, growing expertise and competitive advantage, and creating more competition in the marketplace.

These agency-created brands are, in effect, challenger brands. With less money to invest in above-the-line activity, their ideas often have to be strong enough to sell solely at point-of-purchase. Perhaps in their favor is the fact that, without a large corporate reputation to protect, creative agencies have more freedom to take risks than some of the more established brand owners-making it easier to get innovative ideas off the ground and to market faster.

Much of the success of Fat Pig chocolate was a result of its standout on shelves. Granted, the product itself was different-organic, milk chocolate with a flavor and texture similar to Swiss chocolate. But its biggest difference? Paul Parton sums it up, “The attitude of the brand. The irreverence. The playfulness. That’s what attracted people to it.”

Keeping up With Consumers

As consumerism gets more democratized and media and technologies progress, there’s huge pressure on brand owners to think and act at lightning speed. Staying on top of new and established brands, keeping pace with trends and gaps in the market and launching products in response to all this is one very tall order.

Creative agencies are well placed at keeping up with these shifts and changes, and how they translate this into the daily cut and thrust of being a brand owner-for themselves as well as their clients-is important. Changing times also mean changing business models, and the agency that can diversify beyond its established commercial strategy is the one that will fare best. Advertising is a good example. This is one industry that has been challenged by its clients in terms of its core competency and how best to measure and value it.

Bartle Bogle Hegarty is a traditional ad agency, and Zag is its separate brand invention company. Adam Arnold, Zag’s general manager, explains the importance of creating additional business models to stay competitive. “BBH specializes in big ideas, such as Vorsprung Durch Technik for Audi, ideas that can create real value for our clients. Zag came about when we thought about trying to create some of this brand value for ourselves.” Of course it’s risky, but by setting up a separate company like Zag, the risks inherent in creating new types of value are made more manageable. “The benefits come with owning up to 100 percent of the rewards,” says Arnold.

The lessons are equally valuable. Take Zag’s assault alarm brand for women, Ila. “Ila started out small with the challenge of making it on-shelves in the big retailers. So we really felt all of the pressures that our clients feel on an everyday, ongoing basis,” says Arnold. “Everything we’ve learned has made us much more commercially aware and really brought home the challenges our clients have in selling their products. Clients also respect that we are making the effort and taking the risk.”

Brooklyn Brothers credits much of the success of its Fat Pig brand of chocolate to its playful, irreverent attitude and design.

Enjoying the Ride

Of course, creating successful brands isn’t just what creative agencies are good at. It’s also what they love to do. It’s what they live and breathe. So taking their own ideas to market is surely just a natural next step. Joyce Verburg of Zarb Champagne, says, “The enormous amount of free publicity [is] the result of the real love and hard work we’ve put into building the brand-its authenticity is being well received.”

The Brooklyn Brothers have also enjoyed the exposure. “Fat Pig gave us tremendous insight into how engaging ideas in any medium (packaging in this instance) could generate a viral effect,” says Parton. “There are now thousands of pages of online content devoted to Fat Pig and we’ve developed almost none of them.”

Hot on the heels of its tea brand success, Elmwood recently created a beer brand. “We launched Good Cheer Beer during the Great Recession to encourage people to enjoy a morale-boosting chat over a beer and to support their local pubs at a time when they were closing down at an alarming rate,” says Elmwood’s Schreiber. “It was also another test of our ability to launch a brand in a saturated market, again taking a novel approach to its positioning and attitude. But make no mistake, it’s a really well-crafted brew, too.”

The benefits go much further than creating new revenue streams. It’s also good for relationships with retailers, collaborators and peers, as well as clients. “Our clients benefit from our experiences taking our own brands to market,” says Schreiber, “but much of our success is actually down to their generosity in sharing their knowledge and expertise with us.”

Paul Parton of The Brooklyn Brothers supports this view. “It’s fun to make products but it’s hard to make money,” he says. “It’s made us appreciate our clients so much more. We always thought we did the hard bit but now we know that they do.”

Natalie is a journalist and copywriter, with her most recent articles focusing on packaging trends and eco-packaging. She also works with corporates to help establish their strategic direction and tone of voice, and runs writing workshops too.