I first met Pete Lerma when I heard him speak at South by Southwest in 2009.  In short, I was impressed and determined to learn more about his shop.  I’m honored to have them profiled on the Ad Industry Innovators blog series today.

Founded in 1995, Click Here is the digital division of The Richards Group, a privately held full-service branding agency based in Dallas, Texas.

Probably the strongest story about ClickHere  is that they grew out of a well established organization where brand development was second nature–and in the interactive world, that’s unique.  If asked to quantify that Lerma quickly points to the fact that a number of shops provide similar services, but none can back them up with a resumé that includes more than three decades of branding experience.

“We leverage this experience to deliver digital brand integration, marketing strategies and technology solutions that help our clients build brands online.  And as experts in the full spectrum of digital marketing services, our clients count on Click Here to deliver a holistic, integrated approach to solve their business challenges.

The ClickHere team includes nearly 100 digital marketing professionals specializing in strategic planning, management, media, creative, production and digital development.

1.  What was the aha moment when you realized “our company needs to be doing things differently than we have been.”?

It happened in early 2008. The prior year had been a challenge for us. We had grown by 50 percent. But at the same time, we’d had a lot of our talent poached by traditional agencies trying to build interactive capabilities. So we had a lot of new talent and a huge influx of demand for what we do.

So at the beginning of 2008 we instituted a dynamic process we call the “Continuous Process Improvement Initiative (CPII).” It’s a cross-disciplinary evaluation and improvement program that gets everybody in the company involved in making us better. There’s a lot of communication from leadership to the staff about what’s happening within CPII. Additionally, there’s ownership of the process at all levels within the organization. I believe, wholeheartedly, that this is everyone’s opportunity to shape the future and the success of the company.

It has made us better systematically and has fueled innovation and creativity. It’s a simple process to implement and manage, so we’ll continue to use. We’ve found there’s a little bit of magic in it. The improvements we’ve seen are dramatic, and the speed at which we improve and evolve is incredible.

2.  What books are on your nightstand or great blogs on your Google reader?

I recently read Resonant Leadership. More than anything, it reinforced my beliefs about what makes a leader great. It’s all about inspiring with actions and a positive attitude. Those who are able to lead with emotional intelligence find it much easier to gain the trust and respect of everyone in their organization.

Outliers: The Story of Success is a fascinating study of how people succeed and why. There are lots of points in our lives when outside powers influence our path, whether we know it or not. Outliers dives deep into how those situations might affect us long term. It made me appreciate where I am in my life, while reminding me that I’m not completely responsible for any level of success I might achieve.

Our blog: blog.clickhere.com. Some might say I’m a little biased, but it contains a lot of really smart and insightful thinking from the people I work with every day.

3.  Give me an example of marketing you think is brilliant and why.

Nike. Everything they create makes me want to get off my butt and do something. Every single time, I’m inspired. From a digital standpoint, the Nike+ program is brilliant. The use of music and technology to build a community is simply beautiful. It truly crosses the line between advertising and building a fully interactive experience around the brand.

I talk a lot about digital being more than just an ad medium – it’s multidimensional. Digital is an ad medium, sure, just like TV, radio, print, outdoor, etc. But it’s also a communication channel, where a brand can engage its audience in a dialogue, where it can observe conversations as well as participate. Digital is also a retail channel where people can buy the brand’s product or service. And through that same retail channel, the brand can provide customer service. Finally, digital is a life utility. In an application-centric sense through things like mobile, email, calendars and GPS, brands can make themselves beneficial to their customers in ways other “media” can’t replicate. And I think Nike gets that.

4.  We’ve all read that the pitch/RFP process is broken. Many agencies aren’t even interested in competing in pitches. Do you see an alternative to this process?

Let’s face it; it’s an imperfect process. What I think needs to happen is agencies need to be more selective about the ones in which they choose to participate. We have a series of questions we ask ourselves up-front:

1.  Can we make a difference in the business?

2.  Can we do great work?

3.  Can we make a reasonable profit?

4.  Can we have fun?

If we can answer “Yes” to all of these questions, it’s something we’ll go after with everything we’ve got. But there are times when we’ve gone into a pitch where we knew the assignment wasn’t a fit for us. We went into it hoping we could change the situation. And the end result is always undesirable: we lose the pitch, we win the client but wished we’d lost the pitch, etc.

If agencies will be more honest with themselves up-front, I think they’ll see the RFP process as less imperfect.

5.  What does the agency of the future look like?

I talk a lot about integration. I’ve studied lots of agency models for integration. And I’ve concluded that the model doesn’t matter. Integration is a mind-set. It’s about everyone, offline and online, starting with ideas (not media platforms) to create “oneline” between a brand and a customer. Integration is idea-centric, but leverages each touch-point to its maximum potential. I heard a term the other day that I thought was brilliant: “Matching luggage.” Integration is not just about “matching luggage.” And the agency of the future understands that.

6.  What do marketers need that agencies are not giving them?

See previous answer.

7.  Who do you admire and why?

The people I work with every day. When I interview new talent, I’m often asked what I like best about our company. My answer is the same every time – the people. There are people in this company who have given me incredible opportunities and inspired me to grow the practice. In return, I’ve felt it necessary to allow people those same opportunities. When someone sees a need in our company, they have my full support in creating innovative solutions. As a result, I’ve seen people come straight out of college and quickly grow into senior leaders in the company. Those people inspire me and have my everlasting admiration.

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StrawberryFrog landed on the scene in 1999 making an immediate splash. I’ll try to avoid the frog puns but that one literally jumped out. (ooops.) If you were in the biz in the late 90s, they were constantly hopping across your field of vision-this upstart that couldn’t be ignored.

Seemed everyone was intrigued with Strawberry Frog. Here was a small shop taking on the biggest agencies, getting in front of major clients and winning. They inspired those of us in small shops because they represented a shift in the way the business had always been done.  StrawberryFrog was proof that strategically sound creative and spot on execution could win without all the layers of the Madison Avenue giants.  Ten years later this New York-based global advertising agency is still independent and employee-owned, which says a lot about founders, Scott Goodson and Karin Drakenberg’s vision and StrwaberryFrog’s place in the world.

Others outside advertising have also recognized that vision: The Wall Street Journal selected Karin Drakenberg, cofounder and COO, as one of the 25 best women leaders to watch.   The New York Times, Business Week and CNN have heaped prasie on the Frog as well.

Remembering the early days Scott Goodson told me how “StrawberryFrog put on some of the world’s most iconic brands besting some of the most respected and established agencies in the process such as BBDO Worldwide, McCann Worldwide, Fallon London, and Widen & Kennedy for the global Heineken brand.

“StrawberryFrog attracted challenger brands naturally because of the agency’s positioning. But then we started to win other kinds of brands, those that were famous and needed strategic excellence and re energizing to a new consumer base. From these diverse clients the agency quickly grew into a credible micro agency for brands looking for an elite agile partner to take on huge account globally with a very different business model.”

StrawberryFrog not only executed major campaigns across Europe using an innovative lighthouse agency model, with small customized teams across the continent, it also developed strategy, communications planning, and multi-disciplined creative for over 150 markets worldwide. Nothing like this had ever been seen outside of a holding company solution. This was new ground. The Frog way.”

StrawberryFrog’s competitive edge is Cultural Movements. They believe a brand can identify, crystallize, curate and lead a Cultural Movement that people want to belong to. Cultural Movements activate the customer base, not just broadcast to them, a strategy that has proved prophetic with the rise of social media.

Scott’s great at writing like he’s having a conversation and not a rote interview.  I want these profiles to feel like you’re sitting in a coffee shop having a discussion.  So settle in–this is a 2 venti chat with a bathroom break in between.  Scott’s got a lot to say about the Frog, and for good reason.

1. What was the aha moment when you realized “our company needs to be doing things differently than we have been”?

It was February 14th, Valentine’s Day 1999. That is when we founded StrawberryFrog – an agency that combines the power and scale of the big with the spirit of the small to create a faster, more innovative, more agile brand of agency.

The very next day we started working with our first client: the Smart Car. I decided to start the agency in Amsterdam because of close proximity to clients I had previously worked with from Sweden. From early leaps, we went on to work with Heineken globally, Microsoft and, a few days short of our tenth anniversary, we launched Frito Lay’s TrueNorth brand as one of the primary sponsors of the 2009 Academy Awards.

The ‘aha’ moment behind StrawberryFrog happened years before 1999. We had seen the opportunity for a new kind of global advertising agency from our perch in Stockholm, Sweden, where Karin and I (co-founders of StrawberryFrog) had spent most of our advertising careers. In Sweden, brands were ideological movements, not merely ad campaigns. IKEA, Diesel, Absolut, and Volvo are examples of brands that succeeded in creating fanatical followings, developed by agencies in Sweden, but travelling far beyond Sweden. Consumers not only bought products, they joined the brand and wanted a relationship that made them feel better about themselves every time they met it.

In Sweden, huge Swedish multinationals actually preferred highly strategic and creative independent agencies vs. the huge network agencies. I began my career working on Ericsson, travelling around the world to launch their brand. I found that our clients wanted a more intimate relationship with their agency and preferred customizing a highly focused, agile team of smart people around their brands who could carry it to consumers in any country. This was a massive eye opening experience for me. Before that, I thought the only way to do global advertising was by working with a huge corporate advertising agency network with offices in every country.

My experience in Sweden taught me that you could build global brands without a network. That a new kind of agency could do what huge clients need and want, but could do it differently-more effectively and more efficiently. You had to because Swedish clients didn’t have the budgets of their American or British counterparts-this was a learning experience and created phenomenal confidence. In Sweden, a country that literally legalized TV advertising in the late 80s, you did not have 60 years of how advertising was done as a legacy for how advertising had to be done. And this freedom created in me huge dreams about where the industry could go.

“Ok, ok,” you say, “enough about Sweden.”   I’ll get off it in a moment. But the point is that the Swedish experiment worked. It convinced me that you can steward a huge brand without the infrastructure of a huge traditional agency. My experience co-owning an advertising agency in Sweden laid the foundation for what was to become StrawberryFrog. In Sweden, we developed campaigns for Swedish multinational brands; after a few years, we started to work internationally for Finnish clients, then German clients and then Swiss, British and US clients. But doing it from Sweden was an obstacle for many of the global clients Karin and I wanted to work on. After ten years in Swedish advertising, we were developing loftier goals, a higher level of confidence, more clarity around what we wanted to do in this industry, and who we wanted to be when we grew up: A Frog.

It’s fun to remember those days as I sit at my desk here in New York, but StrawberryFrog was born as a tadpole of this experience. From the outside it may seem difficult, crazy even, to think of building a new agency, modeled from the beginning to take on major brands with scale, but frankly, it wasn’t. StrawberryFrog was a company that I enjoyed getting up in the morning and going to work for.

During the past ten years, we have had our highs and our lows, and we have learned a great deal from the process. Today we have clarity, a select group of the very best clients, and a world class management  made up of Kevin McKeon (who launched and stewarded Johnny Walker’s Keep Walking, Axe,ING,and Virgin Airways), Ilana Bryant (of Smirnoff, Levis fame), Chip Walker (who stewarded Starbucks, Wrigley’s ad Jim Beam), Heather Fullerton (who stewarded Sony Ericsson, Nokia & Ikea) and Ramesh Rajan, the former CFO of Mcaan World Group and our recent addition of Sophie Kelly (who previously lead the global Diageo Smirnoff, Bailey’s  and Cuervo brands as well as having been on the relaunch of JetBlue) to our management team, as well as Peralta, Jiro and Patricia in Brazil, a more purposeful, focused manner about the firm.

Over the years, clients came to StrawberryFrog for strategic and creative excellence. As we grew, StrawberryFrog attracted larger and more disciplined clients. These clients taught us the importance of processes and systems that enabled us to scale brands.

2. What books are on your nightstand or great blogs on your Google reader?

• Imagining India.
• I am an avid fan of David Wiggs        (aww gee)
• I also peruse the likes of my friend Guy Kawasaki
• Fred Wilson
• If you’re a student of advertising, I’d suggest Dino “Chroma” up in Toronto
• and the Hidden Persuader (probably the best blog for any student of advertising)
• For entertainment, integrity and inspiration I like http://meltingpotfamily.blogspot.com/

3. Give me an example of marketing you think is brilliant and why.

My wife came up with a brilliant idea on Earth Day to convince the entire town of Bronxville to walk, rather than drive, their kids to school. This got almost 100% results.

In the industry, many of the brands I have mentioned above are good examples. I like very much what Geico is doing in the insurance category. It has taken a rather serious business and made it accessible and fun. The ads are always fresh, never dull. I also love the work StrawberryFrog has done for Quaker in Latin America. That’s a BRILLIANT idea – love that – setting the appointments 20 years ahead. The New York Times and Adweek, both cited our campaign for TrueNorth snacks as the best advertising during the Oscars.

Word of mouth remains the most powerful source of marketing and whoever is behind the marketing of the Bakugans toys is a genius.

4. We’ve all read that the pitch / RFP process is broken. Many agencies aren’t even interested in competing in pitches. Do you see an alternative to this process?

StrawberryFrog’s management decides to pitch a very select number of clients each year, Instead, we prefer to take on assignments to get to know the clients. Over time these assignments either take root and grow into strong, mutually beneficial relationships, or they do not. They more often do.

When we opened our New York office, we were immediately asked to pitch the Harris Direct account against BBH, Hill Holiday and TBWA. To our surprise we won the pitch. We were then asked to take on a series of other pitches, such as the MINI USA pitch which we lost, then the Wal-Mart Sam’s Club pitch which we won, and then the massive $650MM Hyundai US pitch, which we lost to Goodby.

After a few big pitches under our belt, we decided to take the foot off the pedal and focus on the clients we had. We stopped pitching, waiting for the right Frog Client-who thinks big and whose products excite us-to come along. Clients looking for a paradigm shift, clients wanting to spark Cultural Movements, which we consider to be our DNA-our competitive edge.

Pitching leads to AOR relationships with clients. We are asked by clients to take on short-medium term assignments, which lead to more assignments and very good relationships with these clients. Over time, this has been a better model for us than entering into pitches every five minutes.

5. What does the agency of the future look like?

What is the agency model of the emerging new market?  The better agency model must do three things:
It must have a new ideas culture, a new value culture, and a new talent culture.

The agency model of the future is built around the value of ideas. You might say there’s nothing new about this point. Our industry talks a lot about ideas.  But at the same time, we have allowed the emphasis, the value, and the fundamental business model of our industry to shift away from ideas and to focus on execution.  A lot of lip service is paid to the value of ideas, but agencies are often regarded more as executioners-suppliers-not as idea generators. In the future, suppliers will be valued less and squeezed more, while idea generators will be most valued-because they will create the greatest value across every industry sector, not just our own.

So the new agency model has to move the value of our industry away from execution and back to ideas. First, by demonstrating and standing up for the value of ideas. And second, by outsourcing execution.  Now, by outsourcing execution, I DO NOT mean for a moment giving up responsibility for execution. It is very important that we STEWARD the process – and we do this flawlessly for some of the biggest advertisers in the world – but it is less important to feel we must execute everything and provide a full range of execution services “in-house.”

The often self-inflicted pressure on agencies to be able to claim, “We do absolutely everything,” is entirely counter-productive to a culture focusing on and celebrating the value of ideas.

Interestingly, outsourcing execution not only re-emphasizes the value of ideas; it also re-emphasizes the value of specialist executioners. Idea creators and idea implementers are both key.

We work with huge media partners and massive digital production companies, our “Fedex” of the execution marketplace. They are exceptionally valuable partners when it absolutely, positively has to be produced overnight, or over a vast geography, or managing a massive budget.

At StrawberryFrog, protecting a true “IdeasCulture” has always been our aim. We haven’t embraced this change for change’s sake, but in order to ensure new creativity and originality, as well as innovation and a hell of a lot of agility. We have always been about the value of great ideas, and outsourcing execution to media buying companies or major digital production organizations was a key part of our founding philosophy ten years ago.

At StrawberryFrog we have extraordinary talent in-house, but we also outsource into a unique network of talent in lots of areas of speciality and experiences. And after ten years, they are all over the world. Pulling these partners into the StrawberryFrog team gives us tremendous reach and power, innovation and dynamism, as well as some unconventional disciplines you wouldn’t find in your traditional agency-such as mobility crm capabilities and social media listening.

Not every client is ready for this – yet. It takes modern marketing management to understand the true value of this model vs the traditional legacy agency.

The StrawberryFrog model, developed ten years ago, was inspired by architectural partnerships and feature movie productions: the best available talent is assembled from all over for the duration of a project. It’s been perfected over the years through huge campaigns for major clients not inspired by the old agency model

6. What do marketers need that agencies are not giving them?

When clients call StrawberryFrog they are looking for results.

Strawberryfrog is, and I am pretty sure of this, the only advertising agency in decades to have invented a dramatically new business model. This model has proven that it can beat the competition in the four decisive areas, which already ruled trading in the Fertile Crescent 10,000 years ago and will probably stay with us for another while: better, faster, more innovative and more efficient.

7. Who do you admire and why?

I admire people who believe in themselves and their own ideas. I don’t believe the advertising systems of yesterday are the systems of tomorrow.

Most of all, I admire those clients who want something better and who align themselves with catalysts, challengers, and pirates who make change happen.

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No, Al Gore did not (re) invent the ad agency today when he said, in effect, that the only sustainable advertising model will be one where clients buy yeoman produced spots for as little as $1000. He did make some valid points, however, and backed them up with facts like ‘Viewer produced spots on his new Current TV network are preferred by his viewers 90% of the time.’

Al Gore is just one of many voices lately who have said we’re in uncharted waters.

• Dan Wieden has no idea what’s coming in advertising, although to his credit he doesn’t think the sky is falling, he sees this as an exciting time and I admire, and choose to share his point-of-view.
• Bootb (yes, I thought it said Boob the first time I read it too. FAIL on the name) in the Netherlands is crowdsourcing the ad agency and turning everyone into a marketer (or so they think). This model had marketers of every stripe with their hackles up this past March at SxSWwith a lot of the wrath focused on Crowdspring by the likes of David Carson and others. Mostly around the sticky spec work issue.
• Accellteon says “Today’s marketing problems will be solved by people with diverse skill sets” and I have to agree with the opening statement of the press release–although I haven’t read the ebook they’re hawking yet.
• Scott Goodson of Strawberry Frog has said “Why not give clients the opportunity to put teams of cherry picked talent together to work on their business and generate the best ideas? If a client decides , “I don’ want an agency, just want that particular team, made up of top talent across these areas” why wouldn’t we agree to collaborate on shared business with shared reward?” 

None of this means the end of the ad agency but it certainly signals the end of the ad agency as we know it. The decline of traditional advertising is a reality that’s been with us for a while now–it didn’t just happen when Oprah got on Twitter.

So what does this all indicate? The rise of classes in marketing? I think, yes. The end of the industrial revolution of marketing as Gore said in the above article? Probably not.   So, what does this new marketing society look like? Dare I say, marketing social democracy! I’ll explore this in part 2.

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Alan Brown is one of the founders of DNA-Seattle.  Just starting its second decade of business, North-Westerners will know them by their recent campaign for PEMCO Insurance.  The spots are as good as anything I’ve seen nationally in their category (or out of category, for that matter).  The campaign is smart, uniquely relevant and successful, judging by the commitment CMO, Rod Brooks has made to the work.

DNA-Seattle’s focus, according to Alan is to “help our clients achieve meaningful results in the short-term while building their long-term brand asset.”  They’re the 6th largest agency in Seattle (by billings) and employ a staff of 40 to produce work for clients ranging from BECU, University of Washington, American Express Publishing, Avon Foundation, MultiCare and, of course, PEMCO Insurance.

I’m proud to profile them in this series!

1.  What was the aha moment when you realized “our company needs to be doing things differently than we have been”?
The industry has been changing fast over the past 8-10 years.  Technology, media choices and the shift of power to consumers through social media are driving a lot of it today.  But a big moment for me was last year when my mom (who is 75 and lives in Ohio) friended me on Facebook.  The “aha” was seismic.

2.  What books are on your nightstand or great blogs on your Google reader?
I’m a political and news junkie – so I read Andrew Sullivan’s blog, the Huffington Post, FiveThirtyEight and TalkingPointsMemo.  I also check out agency news at Agency Spy.

3.  Give me an example of marketing you think is brilliant and why.
The work that Crispin is doing for Burger King has been pretty phenomenal.  Their latest promotion (Sponge Bob Square Pants) is getting quite the buzz (not all of it good) – but they’ve really found a way to make BK relevant and talk-worthy – from Subservient Chicken to the BK King – they’re using creativity, social media, promotions, event and non-traditional media in interesting ways that are really having an impact on their business.  Right now, BK has committed to increasing their media spending to get a 20-25% lift in their brand impressions.  I don’t know of anyone else who’s doing that!

4.  We’ve all read that the pitch / RFP process is broken.  Many agencies aren’t even interested in competing in pitches.  Do you see an alternative to this process?
Well, first let me say that we’re still interesting in pitching business, and do respond to RFPs that are a good fit for our agency.  However, the point is right on.  RFPs are expensive, and in many cases create an environment that isn’t best suited to finding the right agency/client match.  We try to avoid them by building our reputation with prospective clients and hopefully by getting invited to meet (or even handle a project) without a review.

5.  What does the agency of the future look like?

Right now, we’re seeing a thinning of the herd.  Larger agencies are being gutted as a result of the economy and their clients cutting back.  But I also think that it’s time for agencies to re-think what they’re doing and what their value proposition is.  I think the successful agency of the future will be smaller, more nimble, creative and versatile.  They’ll work in traditional and new media almost seamlessly – guided by a keen ear from the marketplace.

6.  What do marketers need that agencies are not giving them?
An outside perspective, insight and leadership.

7.  Who do you admire and why?
It might sound trite, but I can’t think of anyone I admire more than Barack Obama.  His campaign spoke to me on a level that none other ever has.  I believe in his message of hope, and find great inspiration in his leadership.  I also admire how his campaign utilized social media and a grassroots movement to beat all odds.  He has also reached my 5 year old, bi-racial son – he looks up to President Obama as a role model – and I hope that he has experiences and opportunities that are different because of the path President Obama has blazed.

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