Rare Method president Tom Short says his interactive Calgary agency is all grown up and ready to “play in the digital big leagues.” That rosy assessment comes after a shift in direction following the resignation of founder and president Roger Jewett last August.
Jewett, who split over differences he had with the board of directors about the agency’s strategic direction, was known for his growth-by-acquisition strategy, buying up an average of two marketing services firms per year in Canada and the U.S.
Short, whose own interactive agency, Idea Machine, was bought by Rare Method in 2003, says it now makes more sense for Rare Method to open its own offices in new markets rather than acquire them. That’s what he intends to do in several U.S. cities, including Phoenix, Atlanta and Denver.
Short has also abandoned Jewett’s multi-account strategy, relinquishing 60 smaller clients in the last six months to “focus on going deeper and spending more time” with a core group of bigger clients. They include Travel Alberta, Moxie’s Restaurants, Canadian Pacific, 3M, Bayer Crop Science and TD Insurance.
Short, named president in October, describes the new Rare Method as “an idea driven, media-neutral agency” with a core digital offering supported by multimedia advertising, event marketing and other traditional offerings. He sees this as the agency model of the future, citing the success of digital heavyweight Tribal DDB, an online expert that has recently added more traditional marketing services.
To support the new structure, Rare Method’s management group has been revamped to include more people with interactive experience. It added Nichole Derosiers, formerly of Critical Mass, as director of media and Melanie Zens, another Critical Mass alumnus, who heads up the agency’s newly created project management office.
At least one person familiar with Rare Method says the strategy is a good one. It’s “absolutely spot on for them, their personnel and their offering,” says Andy Shortt of Huxley Quayle von Bismark in Toronto, a former Calgary adman and partner in Push, an agency acquired by Rare Method in 2005. He says Rare Method’s decision to focus on a core group of clients makes financial sense, plus “it allows them to do the best work possible for those core clients.”
However, Shortt isn’t sure Rare Method’s new agency model represents the wave of the future. “They’re still coming at the business from an executional rather than a holistic perspective.” He believes successful agencies will be those where everything-including interactive, traditional and social marketing-is equal. “In the new world there is no such thing as traditional advertising and digital advertising. Digital is traditional now.”
??Still, ??Rare Method’s Short says the agency’s new direction is showing up in financial numbers. Revenues were up 68% to $6.5 million during the last two quarters and profits rose 150% to $293,??453. Short says the agency is on track to do $14 million in revenues this year.
By comparison, in fiscal 2007 (which ended June 30) revenues were $9.7 million, a 36% increase over the previous year, but profits fell 54% to $127,472.
