Next Generation

When last we left DVC Worldwide — as PROMO’s Agency of the Decade, in 1999 — it was laboring under debt from two ambitious Internet acquisitions and anxious to bring in enough work to cover its overhead just as its chief rainmaker was leaving.

Now — four years, one buyout, a recession, and a Super Reggie later — the agency is a healthy business with strong creative, a growing range of disciplines and an impressive list of diverse clients. Déjà vu from 1996, the first time DVC was PROMO’s Agency of the Year.

But this chapter in DVC’s story stars a new cast of characters and a deep purse, thanks to Lake Capital, the venture-capital group that bought DVC in 2000 and continues to fund expansion via internal build-outs and some acquisition.

DVC’s North American operations are under President-COO Sue Furlong, an advertising account management veteran who joined DVC in 1995 to service AT&T, then rose through the ranks. Co-founder George Valva is still CEO, overseeing global acquisitions and start-ups. His initial partner, Peter Dugan, has retired but serves as an occasional advisor on creative and new concepts, as well as mentoring new business and client relationships. (Third partner Neil Contess is now with 141 Worldwide.)

Morristown, NJ-based DVC tops the PROMO 100 this year with $94.5 million in net revenues for 2002 (on $167.4 million in billings), up 3% from 2001 and a whopping 146% from 2000, when revenues were $38.5 million.

Furlong credits Chicago-based Lake Capital for the reversal of fortunes. “We had bought Muffin-Head and Visient, but when we were acquired by Lake Capital that [debt] sort of was all gone and there’s actually a lovely pool of money to do things with. The sky’s the limit.” (Besides Lake, which pieced together Lighthouse Group and sold it to Cordiant Communications, DVC gets funding from Frontenac Co., One Equity Partners, PPM America and Lexington Partners.)

Ironically, acquisition brought DVC its two largest clients, Nestlé and Britvic — which together account for 25% of its 2002 business. They had been longtime clients of Aspen, a U.K. field marketing service DVC bought in 2001 along with training and trade show specialist Bray Leino Group. Those purchases brought in about $43 million in revenues, with another $10.7 in organic growth in 2001. Last year, new clients accounted for a mere $1.9 million in new revenues, with added spending from current clients tipping in another $816,000. (There were no acquisitions in 2002, although DVC continues to shop.)

It’s another irony, perhaps, that DVC now prefers growth via “build out,” bringing in experts to develop a discipline from the ground up. “It’s a tough acquisition market right now, so what we’ve turned to in this economy is finding the best experts in their field to do a build up, and let those people build their ideal company,” Furlong explains. “It’s not that we’re opposed to acquisitions but [this way] you’re not force-fitting cultures together that may not work the same. You start out from the gate working together.”

This spring, DVC hired veteran Mickey Jardon (a co-founder of GMR, now part of Marketing Drive Worldwide) to build a co-marketing division, and last year tapped Big Fat exec John Palumbo to form DVCX for experiential marketing. DVC is just starting a direct marketing/CRM service in Minneapolis under Mike Zeman, formerly of U.S. Communications Rapp Collins and Lighthouse Group, and last year it began DVC Healthcare in Philadelphia. That unit focuses on new product pre-launch activity, working five-to-seven years on a marketing plan as products go from initial patent through FDA approval for launch.

“Co-marketing has come mainstream,” Jardon says. “We want to put some people in the marketplace among the Wal-Marts, Targets and Walgreens of the world to understand what’s going on with them and then translate that for clients.” Initial plans call for about a dozen of these field reps.

DVCX turns a year old this month, servicing current DVC clients such as Schering-Plough’s Claritin and bringing in its own clients, such as Target Stores (for guerilla sampling of private-label Archer Farms to tout “The Taste of Supertarget” for store openings). “It was nice to have clients handing us projects right off the bat, like AT&T,” says DVCX President Palumbo. “And when new clients come to us, we show them DVC’s other capabilities as well.”

Clients had asked for added services, says CMO Bill Donlin. “It’s not like going out on a big limb to put forward an experiential marketing program, because we’ve been dealing with experiential marketing for a number of years.”

The six areas of expertise — flagship DVC Communications, Interactive and Relationship Marketing as well as DVCX, Healthcare, and Co-marketing — have a single P&L and one creative department to keep work seamless.

Last year DVC won Nokia in the U.S. and Sony Ericsson, Hertz U.K. and three project clients in the U.K. Its only loss was Pillsbury when new parent General Mills brought all business in-house. Over five years DVC had worked on mega events, Old El Paso, Green Giant, Progresso and Totino’s.

In January, Gillette named DVC agency of record for its Gillette, Oral B, Braun and Duracell divisions after a yearlong review that culled its roster from 40 promo shops to one.

Labatt USA assigned its 19th brand, Bass Ale, to DVC in January when it bought Bass from Guinness Bass Import USA. “There was never any question we’d award it to DVC,” says Labatt USA President Steve Cahillane. “They’re very good listeners, and solution-oriented.” Labatt shifted to DVC from The Marketing Continuum four years ago in a review of six agencies. “DVC stood head and shoulders above the rest,” say Cahillane. “There was a real groundswell of support for them” from the dozen Labatt execs involved in the review.

Reviews got hairy at times. One company set up six finalists to pitch one after another in adjacent hotel rooms. The night before presentations, DVC’s team went for a quick run-through and “disaster struck,” Furlong says. “Somehow none of our equipment was ‘talking’ to the hotel equipment.” The pitch team called DVC tech support and account folks out of bed at 11 p.m. “Four of them got into cars with new laptops and drove through the night to get it all to us,” he says. “There were no arguments or finger pointing — just laughing” as the crew worked together to fix it (while listening to their competitors in the next room scream at each other all night as they practiced).

Creative muscle

DVC’s diverse client base lets it share ideas across categories. Clients like to hear what’s happening in other industries, Furlong says: “We love to put up our client list for presentations and say, ‘We touch every category you can think of: telecom, entertainment, CPG, food. And we work on No. 1, 2 or 3 brands in the marketplace.’ When you work on great brands, it’s pretty easy to be creative.”

Its strongest accolade was this year’s Super Reggie for Georgia-Pacific’s Do You Know a Brawny Man? campaign (May PROMO). Georgia-Pacific wanted to reinvigorate Brawny as its flagship paper towel brand after its merger with Fort James. Brawny’s brand team wanted to reinvest in the icon and a DVC brainstorming session led by Betsy Berman spawned the idea of letting women build their own Brawny Man. “It evolved from there to a great way for consumers to get involved with the brand,” Donlin says. “They had to spit back to us Brawny’s attributes — strength, versatility, ruggedness.”

Women submitted photos and essays on how a man in their lives embodied those characteristics. Judges culled entries to 12 finalists, then America voted for the winner (fireman Mario Cantacessi). Support included TV, P-O-P, p.r. and, in eight cities, a “Brawny Brigade” of buff handymen visiting supermarkets. Volume jumped 12.3%, Brawny’s share rose a percentage point to 11.5% and profits rose $5 million.

The campaign worked so well because of its “surround strategy,” with print and broadcast, P-O-P, packaging and Brawny’s Web site, says Creative Director Stephanie Murrin. “We were able to bring it to life at every touch point.”

There was also “a little bit of kismet, tapping into a time in the nation when people were looking for heroes after Sept. 11,” Furlong adds.

Brawny Man “is a great example of using all aspects of marketing to drive home a creative promotional idea,” says Georgia-Pacific VP-consumer marketing Rob Lorys. “DVC is highly creative and they strive to be part of the team.” Lorys challenges DVC to stretch for new ideas rather than “fall back on a proven entity because it’s safe.” A new idea is better than Brawny Man II, he says.

Schering-Plough’s over-the-counter launch for Claritin tapped DVC Healthcare, DVC Interactive and DVCX, whose “Clarity for Mind, Body and Spirit” tour hits festivals and retailers in 10 markets this spring and summer (allergy season) with an online sweeps and samples. Ogilvy & Mather, New York City, handles ads.

Speed to market was crucial. Claritin lost its patent protection as it went OTC, and private-label competition would be in market within eight weeks. “We built our plan initially for speed, and had the first promotional piece in the marketplace within 72 hours of FTC approval,” Donlin says. “We needed speed and flexibility, so interactive was the best way to start, then we wanted to go where people were suffering allergies, with events.”

DVC outlined six scenarios based on competitive response and possible court rulings “so we could push one of six buttons to address whatever the environment was,” Furlong says.

Labatt likes how DVC has grown its Copa Tecate grassroots soccer tournament, this year bringing in 7-Eleven as “Official Headquarters of Copa Tecate.” “There’s a real commitment to senior-level management engagement,” Cahillane says. “If I hear about any [problem], it’s always on its way to a solution.”

U.K. clients like DVC’s deep pockets. Its ownership has afforded DVC Sales (the former Aspen) upgrades in IT and innovation, a boon for repping Britvic brands including Pepsi and 7 UP to Mom & Pop stores. “DVC’s investment freed them up to improve the back office, and we’ve grown about 15% with them the last few years,” says Britvic exec Tim Roberts. “That shows our confidence in their capabilities.”

January’s Bowl Bound campaign for Nokia used cell phones as game pieces. Players watched the Nokia Sugar Bowl to match an image on-screen with one on their cell phones. Watch for a bigger push next year when Nokia Sugar Bowl hosts the national championship.

“Clients often say, ‘Don’t worry about the budget,’ but that can be counterproductive,” Donlin says. “We try to be efficient and waste as little time as possible, so if a client can’t afford a certain road, we won’t go down that road while brainstorming.”

While DVC has changed since 1999, the world outside its walls has changed even more. Across the industry budgets are down and tensions are high. “Everyone is hesitant to take a chance,” Jardon says. “It’s very close to the vest, across the industry.” With spending flat, shops are “doing things quicker for less money,” Murrin says. “It tests your talent.”

DVC is working on new-product launches for 2004 and ready to capitalize as marketers lean away from media ads to integrated promotions, à la McDonald’s, Donlin says.

“As that takes root with clients across the U.S., it’ll be interesting to see how they shift organizationally [away from separate ad, trade, and consumer promo groups] to allow themselves to take best advantage of integrated marketing,” he says.

Such a radical reorganization may seem risky, but DVC’s brain trust likes how its own structural shift has turned out.

“We took a risk in an economy that’s fairly risk-averse right now,” Furlong says. “We forged ahead and did what we believe is right for clients’ business, to drive new capabilities — and we’re really growing at a time when a lot of people are standing still.”

Sometimes when you leap, you land on your feet.