Mad Ave's Latest Fetish: Intellectual Property

"Gentleman Callers" candles. "Fat Pig" chocolates. "Dogmatic" gourmet hot dogs. It's no surprise this slew of new tongue-in-cheek brands come straight from the front lines of manufactured hipness: ad agencies. In today's Advertising Age, Rupal Parekh writes about a trend I highlighted in Fast Company's Annual Fast 50 awards; Madison Avenue's latest fetish—intellectual property. Nowadays, as the industry grapples with how it's actually going to make money now that media is no longer the cash cow, these brand mavens now want complete equity ownership of these products ("We would rather invent the next VitaminWater than do the ads for VitaminWater," Anomaly partner Carl Johnson told me when I interviewed him earlier this year).

In addition to Anomaly (our Fast 50 pick which just launched its new shaving line Eos at Target), Parekh rounds up other IP-hungry brethren like Mother, Brooklyn Brothers, and Taxi (incidentally, note how many of these mad men hail from across the Atlantic pond). While many of the new product lines are quirky and irreverent, the truth is, most of the crop including Anomaly are small scale and appeal to a limited hipster demographic parallel to the one they derive from. That said, it's not just these boutique shops chasing the intellectual property train. Agency heads I've spoken to from much larger shops—from JWT to Crispin Porter + Bogusky—all proclaim the next frontier is IP.

Which agencies have succeeded in creating a real, viable, disruptor product, like the green cleaners at Method? Or is all this IP hype smoke and mirrors, which ad agencies are acrobat at?

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  • Kevin Lenard

    Have to agree with both the skeptical tone of Danielle's blog and Alexander D's point above. There's a bit more to creating products and building them into brands than the name, logo and patent of a weird flavor/scent combo. That is NOT the intent of "IP" (and the US patent board is beginning to rise to the challenge of drawing the lines on what can be patented -- or pirated).

    Anomaly's Virgin Atlantic luggage line concept is a good example of what this new IP movement is about at its core. In the recent (and even distant) past, global manufacturers often sprinted off with a new product concept that grew out of the analysis of a clever, strategic, creative thinker at an agency -- someone who had become intimately familiar with a product or a category over the years and was jn a unique position to identify a key insight and opportunity. The agency person never saw a dime out of the breakthrough IP they'd just handed the client, while today young turks are selling simple new product 'patents' to the highest bidder. Yes, the agency person (or team) was under contract to their client, but these days they'd be wise to keep a lid on the breakthrough they've envisioned, quit their job, patent the idea, then sell it independently to whoever sees the biggest potential behind it.

    This gradual shift in IP patents has been, driven, in part, by user-generated content that firms like P&G are enthusiastically reaching-out to in order to tap into, as well as being driven by the growth of patent auctioning sites on the internet. Ideation firms like IDEO are also seeing the downside of being paid $100k to develop a concept that goes on to make millions or billions. The originators of the IP are now beginning to settle for less upfront, but a share of the sales, not unlike what happened with Hollywood stars.

    The core point is that everyone remains in their field of expertise, but share fairly both the risk and reward of launching exciting new products and building them into brands.

  • Alexander Donics

    I think there's better opportunity in taking equity in a joint-creation between an agency and a client, and focusing on the communications aspect of the product, than pretending to have expertise in developing a product start to finish. Agencies were built with the purpose of advertising or communicating, not with the intent to become packaged goods manufacturers or apparel manufacturers.