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Can Alex Bogusky Help Microsoft Beat Apple?

Alex Bogusky built the country's slickest ad shop using Apple products. His next challenge: Persuade people like him to buy Microsoft's stuff.

Bogusky and partners
"Life conspires to beat the rebel out of you," says Bogusky, with partners, from left, Jeff Steinhour, Chuck Porter, and Jeff Hicks | photograph by Peter Yang

"He looked like Jesus," confesses a blushing 27-year-old hipster in gray New Balance sneakers and a zip-up hoodie. She is talking about her boss, Alex Bogusky, the man who has built arguably the hottest ad agency in the country, Crispin Porter + Bogusky. And she is trying to make herself heard over the din of conversation at the New Denver Ad Club, where 500 locals have gathered to hear him speak. Bogusky had only recently moved to town after hauling half of his now 700-person operation from Miami to nearby Boulder. "Just the other day, I was walking by the kitchen in the office," says the young art director, two years into working for Bogusky. "There was, like, this halo over him."

On this breezy evening in April 2007, six-packs of Molson and the greasy scent of Burger King burgers -- two brands revived by Crispin -- give the chandeliered concert hall a calculated shot of the lowbrow. In a few moments, the khaki-and-blazer crowd will see the legend live, on stage, where he will share such intimacies as "I once farted on production for a Gap spot" and "Life is a pyramid scheme." Until then, the anticipation is thick. "It's kind of like having a major stage production coming to your small town," says one adman with Frank Sinatra hair. "Like the circus." Another whispers, "I can't wait to hear this guy from Crispin Glover!"

For nearly a decade, the unhip have flocked to Bogusky in the hope that a little of his mystique might rub off. There is no more adept a mechanic of cool, and Bogusky can give it -- and take it away. In 1998, he helped strip the sexy gloss from cigarette smoking with his raw, award-winning "Truth" campaign. In 2001, he subverted the SUV and Hummer fad by getting consumers to embrace "tiny" with his media-bending stunts for the Mini Cooper. More recently, he resurrected Burger King's 1960's-era "King" character, turning it into an unlikely icon, which has since done everything from date reality-TV pinup Brooke Burke to appear in his own Xbox video game that has sold 3.5 million copies.

Bogusky is famous for pushing clients to the edge. His TV work for Volkswagen included a close-up of a horrific, fatal-seeming car crash; for Orville Redenbacher, he called the deceased popcorn pitchman back from the dead; for Virgin Atlantic's business travelers, Bogusky offered up mock porn on a hotel TV network. "What Crispin has been able to do consistently is not just produce breakthrough work, but actually create new audiences for brands," says Mary Warlick, who runs the One Club, which awards creative excellence in advertising.

Now Crispin has been handed perhaps its biggest challenge to date: Microsoft. The tech giant stunned the ad world in March when it passed over safer choices like Fallon, JWT, and its agency of record, McCann Worldgroup, and awarded its new $300 million consumer-branding campaign to Crispin. It was an act of courage or desperation, depending on whom you ask. Over the past couple of years, Microsoft's already problematic reputation in some circles -- as the soulless, power-hungry purveyor of lackluster products -- has suffered a series of self-inflicted wounds. It spent two years and $500 million on the media blitz around the long-delayed Windows Vista launch, only to see the January 2007 "Wow" campaign, which likened Microsoft's new operating system to Woodstock and the fall of the Berlin Wall, derided as arrogant and creatively void. Vista itself sold poorly, leading to price cuts of up to 40%. Worst of all, the flop bred a new generation of Microsoft haters. "Microsoft has really lost control of its image," says Rob Enderle, an influential advisory analyst for tech companies including Dell, HP, and Microsoft. And with its two most formidable competitors -- Apple and Google -- boasting their own consumer cults, that's the last thing Microsoft can afford to do.

Nothing is doing more to carve away at Microsoft's reputation -- and contribute to its loss of market share -- than the assault launched by Apple two years ago in the form of the "Mac vs. PC" spots featuring The Daily Show satirist John Hodgman. The ads became immediate pop-culture fixtures, spawning more than 1,000 video spoofs on YouTube and taking home last year's Grand Effie, the ad industry's highest honor for effectiveness. "Nobody messes with anyone in the tech industry the way Apple has messed with Microsoft," says Enderle. "It's the first time I've ever seen a major national campaign that disparages a competitor, and the competitor just sits back and takes it. If somebody tried to do that to Oracle, you wouldn't be able to find the body." Gartner media research analyst Andrew Frank credits Apple -- whose annual media spend is less than half of Microsoft's nearly $1 billion budget -- with single-handedly rebranding Microsoft "as a kind of self-conscious and self-absorbed nerd that is out of touch with the normal lives and needs of its users."

Countering that nebbishy, pocket-protected image now falls to Crispin. And Bogusky's team is revved up at the prospect. "There was a time," says Jeff Hicks, Crispin's CEO, "when it was Avis against Hertz, Coke against Pepsi, Visa against American Express. I think Microsoft is at the epicenter of the great brand challenge of the next decade -- or millennium."

It's a month after Bogusky's team landed the Microsoft account in March, and the Boulder office is splattered with Gatesian fingerprints, including quotes tacked to the stainless-steel fridges in the kitchen that read like awkward, off-key motivational nuggets: There are over 1 billion Windows Live ID authentifications per day, says one. Bogusky works on a raised platform in Crispin's 70,000-square-foot space, which once housed an indoor soccer field. His desk seems almost to levitate above the vast openness. A shiny new silver MacBook Air sits in front of him, next to his aviator sunglasses.

This is the third Bogusky office I've visited over the past year. His workspace in the firm's Coconut Grove, Florida, office felt like the bedroom of a "departed" teenager: frozen in time, down to the framed photo of Bogusky's hero, Evel Knievel, in midair on the back of a motorcycle. When I went to the new Boulder digs in the spring of 2007, his office had more mature decor -- clean lines, raw wood, and metal. But the polished backdrop didn't stop him from, at one point, grabbing a No. 2 pencil off his desk to stir his café mocha. "I want to get all the chocolate at the bottom," he explained. "I'll probably get lead poisoning."

His latest office is different. It feels for the first time that I'm talking to an executive. "Life conspires to beat the rebel out of you," Bogusky says, dropping one of those lines that could be either authentic on-the-fly wisdom or something he once saw on a T-shirt. "I was at a meeting at Nike recently with a bunch of senior people, and that's just the thought that went through my head. For everyone at the table, I could see how life was trying to beat it out of us."

There's a subtext to his new existentialism. Five months ago, Bogusky, 44, decided to abandon his chief creative officer title for a more corporate one: co-chairman of Crispin, along with partner Chuck Porter. Now, instead of grinding out his famously obsessive late-night edits on the agency's 15 accounts, Bogusky says he'll focus on "flying out to clients and talking about strategy," building out a new industrial-design department, and growing the business, which potentially includes international offices in Europe and Asia. That ostensibly puts the creative burden of the Microsoft account on the shoulders of his protégés, Andrew Keller and Rob Reilly, new co-executive creative directors, who have collectively worked at Crispin for 16 years (Keller for 10, Reilly for 6). "It's up to those guys how they want to run it now," says Bogusky, who has been with Crispin since he was 26. "For sure, I'm passing the torch."

Keller, a blond, floppy-haired 37-year-old, and Reilly, a joke-jousting 39-year-old, are well versed in the dark art of cool peddling. They don't look the part as much as Bogusky (or even Justin Long, the Mac character in the "Mac vs. PC" campaign). But the duo was the creative force behind work for Mini, Virgin Atlantic, Volkswagen, and Burger King. "Subservient Chicken, Chickenfight, Coq Roq," says Reilly, rattling off a few of the BK campaigns. "I don't enjoy doing advertising for things that already have tons of cultural momentum, that people love," says Keller, adding that he'd be less interested in working on a brand like Apple.

The two understand just how delicate the Microsoft project will be. "To try to be cool is to not be cool," Keller pronounces. "To chase cool, you're chasing something that already exists, which means you're always going to be on the wrong side of it, you'll always be following."

In April 2007, long before the Microsoft account came Crispin's way, Bogusky had told me that "Crispin sort of exists because of the revolution in desktop publishing that the Mac brought about. You could be a small shop and compete against Madison Avenue for the first time because all the tools were in your computer." That may explain why Keller and Reilly are today using their team as an early focus group for learning how to persuade Mac lovers to embrace Windows. "You've got a lot of passionate Mac people in here, and they've got to get their head around this thing -- why Windows is genius," says Keller. He and Reilly have outfitted their shared office (inherited from Bogusky) with an Xbox 360, which they've been using as a wireless hub. But their joint desk also holds two ultrathin MacBook Airs. When I ask if they're making their team get rid of their iPods and PowerBooks, Reilly responds, "It's not a matter of forcing people. It's getting them to want to use it. If you can't, you're not going to do great advertising."

Jeff Steinhour, a Crispin partner who helped reel in the Microsoft business, describes visiting the Microsoft campus in Redmond, Washington. With the "flags and buildings and graphics," he says, "there's no mistaking where you are. The vibe is, We know what we're doing, and we're pretty good at it." Of course, that vibe is also part of Microsoft's problem, a perceived arrogance that has worked against its efforts to become connected with real people, let alone beloved by them. "They need a little bit of a shake-up," Steinhour asserts. "I think they're watching the tech world very closely and how brands become popular. They're saying, 'How do we get in that conversation?' "

"I think Microsoft is the great brand challenge of the next decade -- or millenium," says Hicks. Adds Steinhour: "They need a bit of a shake-up."

It's not as though Microsoft hasn't tried before. In late 2006, as part of its $500 million Vista launch blitz, it enlisted comedian and Daily Show contributor Demetri Martin to do a series of Webisodes; after a national comedy tour, and a special on Comedy Central, the campaign failed to penetrate pop culture and even drove Apple fans to rail on the blogs that Microsoft had ripped off Apple's Hodgman campaign. The irony is that Microsoft had actually worked with Daily Show cast members Rob Corddry and Samantha Bee before Hodgman was on board with Apple. But to Apple zealots, it didn't matter. And to everyone else, hipster irony from Microsoft just felt wrong. Whereas Apple helped launch Hodgman into the stratosphere, Microsoft sent Martin back to Comedy Central.

If Bogusky's creative exit seems untimely, Microsoft sounds unconcerned. "They understand our company and where we want to take it," Microsoft explained in a prepared statement (the only comment the company would make for this story). Bogusky represented Crispin at the Microsoft pitch and is unlikely to hang back once the creative is developed; his control-freak tendencies are widely known -- and desired -- by clients. Says one industry person who competed against Crispin for the Microsoft business: "It's like when George Clooney walks into a room. It doesn't matter if Hugh Jackman walks in -- everyone wants George."

Bogusky plays down his star power. "When people meet me, they almost always say, 'You're shorter than I thought,' " he tells me. "That's the difference right there. The public self is taller." But his public stature unquestionably makes Bogusky a target, and the industry has been waiting for years -- with equal parts admiration and envy -- for Crispin to stumble. When the agency won Burger King in 2004, critics said that the shop's style could only mesh with small, indie brands. When Crispin expanded to Boulder in 2006, competitors said the divided house would implode. Last year, when Volkswagen's head of marketing abruptly left, insiders predicted Crispin would lose the $350 million account, one of its largest. None of that came to pass. Instead, in the last year the agency has lured blue-chip brands including American Express, Best Buy, Domino's, Nike, and now Microsoft.

As Crispin draws bigger, more-traditional clients, the risks grow proportionately. Edginess and risk taking mean nothing without results. When I visited Miami and Boulder last year, I sat in on creative meetings for Haggar, a low-end menswear manufacturer, and Ask.com, Barry Diller's search Web site. Both were being touted by Crispin as the agency's next big turnaround candidates. But both resulting campaigns -- "Making Things Right" for Haggar and "The Algorithm" for Ask.com -- met with mixed reviews when they appeared, then fizzled out completely. "You get into these relationships that are like an arranged marriage," Bogusky says. "Barry [Diller] really wanted us to do the [Ask.com] work. But I think some of his guys were like, 'We like what we're doing and don't want to.' "

Crispin also lost Miller Brewing as a client, a $150 million account. (Crispin resigned, but the move was widely reported to have been preemptive.) And while Hicks, Crispin's CEO, talks about client VW as if it has achieved turnaround status, the work has been inconsistent, and VW's sales are off 6% this year. Similarly, last year, Crispin pulled off a coup by winning away Nike's Running and Nike+ business from the sportswear company's longtime agency, Wieden+Kennedy. Yet when Crispin's first Nike TV spot came out in December -- a testosterone-fueled footrace through time, from the Wild West to the modern day -- the reviews were underwhelming. "I think everyone wants to see the work get better than it is," concedes Bogusky.

Compounding these challenges is the agency's financial structure. Back in 2001, Chuck Porter, who owned the firm, then a little-known regional shop, decided to sell 49% of it to a small Canadian public company, now known as MDC Partners. "Chuck wanted to cash out a bit, at least to know that he's not going to die alone in a retirement home," says Bogusky, who has known Porter, a family friend, since Bogusky was 8 years old.

MDC paid a mere $6.5 million for the stake, plus $9.2 million over time. MDC also secured options to buy additional stakes every few years at a fixed price. Last November, even as hot new digital shops were getting snapped up for hundreds of millions, MDC exercised an option to increase its stake in Crispin by 28% -- for just $28 million. Ouch.

"Crispin is 12 times the size it was six years ago," gloated MDC CEO and chairman Miles Nadal, when I met him last summer at the exclusive Core Club in Manhattan. MDC owns stakes in 40 agencies, but Crispin is its biggest source of profit. In fact, RBC Capital Markets estimates that MDC's 77% stake in Crispin is worth more than $300 million, far more than MDC's market value. "The problem," says Jeff Tkachuk, a media analyst at BMO Capital Markets who covers MDC, "is that Crispin's value is being dragged down by the other operations, corporate costs, and all the other stuff that's associated with MDC."

Even when Crispin wins a client like Microsoft, shares of MDC -- now under $7.50 -- barely twitch. "In my opinion, MDC should not be a public company," admits Porter, who despite a lofty MDC title of chief strategist appears to have little operational influence there. "Not that my opinion means that much. Philosophically, MDC is not designed at this point to deliver ongoing quarter-to-quarter growth. That's just not the way it thinks."

I asked Porter how Crispin could have locked itself into such an arrangement. "Other people have said, 'You did a really sucky deal,' and I'm like, you know, I think the only people who feel good about the deal are me and Alex [Bogusky] -- and Miles [Nadal]." Porter argues that selling to MDC gave Crispin the security to take the risks that have made them successful. "It's impossible to say we would have performed the same way if we hadn't done it," he says. "One of the good things about us being such a big fish in the MDC pond is that we do get our way. We would always trade money for freedom. Always. Always."

Porter does concede one point. "Any analyst would say: a) MDC's stock is in the tank, and they're not performing as well as they should, and b) Crispin has performed really, really well," he says. "So there's a disconnect here. You can't deny that." He pauses. "If you've got someone who wants to come and buy the whole thing right now, we can talk -- the whole ball of wax, the whole MDC."

One thousand miles away from Boulder, in a biometrically sealed, Frank Gehry -- designed compound outside Los Angeles, sits TBWA\Chiat\Day's Media Arts Lab. It is in this vaultlike building -- created at the behest of Steve Jobs -- that the "Mac vs. PC" spots are conceived. Chiat\Day has been making Apple's ads for nearly 25 years -- going back to its iconic "1984" spot -- and the lab's isolation ensures not only that the creatives do their best work but also that nothing leaks out. "I hear they have some kind of eyeball scanner," says one Chiat\Day art director I spoke with who, despite having worked at the agency for five years, has never set foot inside the place.

Jobs's unerring ability to locate and amplify what's cool in the culture is among the big challenges in Crispin's quest to give Microsoft new street cred. But Microsoft's degree of patience and tolerance for risk -- even embarrassment -- remain major variables too.

"Crispin probably has one chance to do something big with Microsoft, and if it fails, I think all bets are off for the agency," says Gartner analyst Frank. Crispin certainly knows the stakes are high. "From the outside, this looks like a strange marriage," says Crispin partner Steinhour. Particularly since Crispin has been the Apple of ad agencies. Add up its knack for creating cultural phenomena instead of piggybacking on them, breaking industry rules only to have others follow, orchestrating mass PR stunts, and even turning brands into bullies without customers realizing they're being bullied -- you could equally be talking about Apple. The folks at Crispin like to give the impression that the Microsoft assignment is less about the money than about the thrill. "I think we've learned," says Steinhour, "that when you take on these kinds of odd relationships with big companies that need a kick start, the motivation to overcome those suspicions is a lot of the fun." But Crispin knows better than anyone that "fun" isn't the metric for its clients. Noting that Burger King has had 16 straight quarters of growth since Crispin took on the account, Hicks says, "Your work is only as good as the performance of the brand and the business."

Crispin has been restricted from revealing Microsoft's strategy or creative ideas for the campaign, which is slated to break in July (and they're even being cagey about that date). Whatever is done, though, will clearly involve an attempt at a major personality overhaul. "It's kind of like 3M," says Bogusky, who calls Microsoft "smart as fuck." 3M is "a very cool company, but I don't think if you see a roll of Scotch tape, anyone's going, 'I've gotta party with these people.' " Bogusky explains that with previous clients, instead of hiding qualities that may seem negative -- such as Mini's tiny proportions or Burger King's fat content -- Crispin exploits them. "It's part of your job as a marketer to find the truths in a company, and you let them shine through in whatever weird way it might be," he says.

Naturally, that risks pissing someone off. "I think really good brands have to have something of a thick skin these days," Bogusky says. Last year for Coke Zero, the Crispin team designed a campaign in which one division of Coke sues another for "taste infringement." Bogusky says Coca-Cola's ability to be self-effacing was a disarming way to make the brand likable. "I think it works so well for Coke because it's the most corporate of corporate," he says. "It wouldn't work for Jones Soda." Then, once Crispin finds a through line that works, adds Bogusky's disciple Keller, "we pour gas on it."

For Microsoft, some of those combustibles may lie in the edgier parts of its empire -- Xbox, Zune, Halo, even the company's stake in Facebook. Bogusky hopes Microsoft will give his team the same kind of access Apple has granted Chiat\Day. "A big part of positioning those products is being there in those early stages, knowing what the engineers think the story is, so the story doesn't get lost," he says, noting how deep inside his agency has gotten with partners like Burger King. "Apple is probably sharing stuff that maybe it's afraid to share, but that allows the agency to get in at a level where it can produce work like that."

Not everyone is convinced that Microsoft's problem is simply about ad messaging. "Microsoft seems like a company whose executive staff is isolated and unable to move and take corrective action," says tech analyst Enderle, explaining the obstacles for Crispin. "I worry more on the client side than the agency side." And while other PC makers like HP have been able to gin up new zeitgeisty appeal -- using, for instance, Gwen Stefani and Jay-Z -- Gartner's Frank isn't so quick to assume that hiring Crispin means Microsoft is ready to really let its hair down. "I suspect what Microsoft would most like to instill in people's minds is they are innovators and leaders, and that's what they think of as being cool," he says.

Historically, that may have been good enough, given that for 30 years most of Microsoft's customers have been enterprise geeks, not film students and graphic designers. But Microsoft's increasing desire to be all things to all people -- tech titan, advertising company, music hawker, video-game platform -- means it may have to do more than just make consumers aware that it is the massive force behind so much of their lives. It may need to make people willing, even eager, to cede that much control to a single company. If Crispin can pull off that stunt, it will be not only the Steve Jobs of advertising but also its Evel Knievel.