More Creative Shops Are Commercializing Their Own Product Lines

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Johnson's distinctive eos lip balm | Courtesy of Fuse Project

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Vitrano's healthy "naked" pizza | Courtesy of Fuseproject

Many of you guys are still doing agency work. Did this change how you deal with clients, now that you understand what it's like to be the client?

JOHNSON: I think it makes you better. You're much more commercially aware. When I started a million years ago, I almost didn't know money had anything to do with the advertising business. You had a meeting, took a brief, made some work. It seemed enormously detached from selling something to people.

MALBON: You get exposure to the full gory detail of how clients make and lose money. One of the reasons we like having people at BBH spend some time on Zag is that when they return to the agency, they will be able to have a much smarter conversation with a client's marketing director, or CFO.

Bart Haney

Program manager of Fuseproject. Yves Béhar's design studio has created the Jawbone wireless headset and Y Water, a low-sugar beverage for kids in a distinctive bottle, in partnership with startups.

BART HANEY, program manager, Fuseproject: It brings us a lot more credibility. Clients start seeking us out because they absolutely know we understand the path to market and all of their challenges.

JOHNSON: One of the most amusing things is, of course, we haven't bought a single ad in support of any of our brands. Not one.

VITRANO: That is incredible.

JOHNSON: Why would we? You can do so much if you know what you're doing with product placement, sponsorship, digital PR. It's that whole "I haven't got any money, so I'll have to think." It makes you much better at grinding out media without paying.

VITRANO: The purest form of marketing is in product development, which is why I have so much respect for Fuseproject and the Ideos and Frogs of the world, designing things that fit the hand, that are ergonomic but also sort of fit the soul. People are trying to find those deep-mission ideas that have commercial appeal. It's exciting to figure out how to commercialize something that has real substance.

What's your ultimate goal?

JOHNSON: We are looking to sell these brands and make lots of money. At the moment, we've got five things out there with our money. That is very scary. But one win and that's not very scary. You're going to fail with most of them. So our game is basically work for clients, stay sharp, be good, own profit, roll the dice.

HANEY: Either our ideas will make it or they won't. And the exit is the fail. Most of the equity we put in is sweat equity. If a partner starts a business with the idea, we stay on as the creative segment of it. If it gets sold off or licensed, then we take our share.

MALBON: Take something like Mrs-O.org, as in Obama, a content play rather than a product, taking advantage of the huge interest in Michelle Obama's democratizing style. We've spent, I think, $500 on it so far, excluding the time cost. But we've just signed a six-figure book deal, and we're talking to other partners about extending beyond publishing. It's an exchange of the skills we have for a slice of the equity. Whether it is 4% or 40%, it's the same business model.

JOHNSON: We don't want to own 100% of many things because the collaboration has been enormously beneficial. We've learned a hell of a lot. What do we know about making makeup? [Anomaly has launched two cosmetics brands.] Nothing. One of the biggest dangers is to think you can do everything. We would rather have 40% of a big success than 100% of a failure.