Madison Ave. Lights Up
Upstart ad agencies bring creative sparkle back to New York.
By Devin Leonard

(FORTUNE Magazine) – STEP OUT OF THE ELEVATOR INTO THE PENTHOUSE OF 60 Madison Avenue in New York City, and you are greeted by a large frog constructed out of Mega Bloks. There's a bowl of tiny toy frogs in the lobby. Someone may offer you a T-shirt with a picture of a frog sporting a red beret with a Maoist star like that of Che Guevara. That person might even refer to himself as a frog.

This is the New York office of StrawberryFrog, an advertising agency based in Amsterdam. It is a whimsical place, but people here are quite serious about their mission. The way these self-styled amphibians see it, their firm is small, nimble, and unusual, just like the rare strawberry frog (it actually exists, and it's poisonous!) and unlike the larger, more established "dinosaurs" that dominate Madison Avenue. "We came to blow the cobwebs and the dust out of the attic of the advertising industry," says Scott Goodson, the agency's chief creative officer and co-founder.

That's a familiar ambition on Madison Avenue, where yesterday's upstart has a way of becoming today's dinosaur, but StrawberryFrog has actually done it. Since it opened its doors in Manhattan a year and a half ago, the agency has outwitted older, more established shops to win more than $100 million in new business. It did Pfizer's anti--cardiovascular disease "Boomer Coalition" project, which included a viral campaign of female boomers exchanging stories about their former boyfriends from the '60s and '70s, and an online auction on eBay where Chevy Chase, Phil Collins, and Henry Winkler designed and then sold off Levi's blue jeans. StrawberryFrog has also created a Japanese choir that sings in Pidgin English about the virtues of Asics Tiger sneakers. The choir will be marketed with a campaign that includes ringtones and mobile-phone ads. Soon it will embark on a world tour. Goodson says these aren't really ad campaigns; they are more like political movements for clients and their products.

Some of what Goodson says is hype--he's an adman, for goodness' sake. But StrawberryFrog's arrival on Madison Avenue is a signal that something exciting is going on in the advertising-agency business, which has been devastated in the past five years by the recession, media fragmentation, conglomeration, fed-up clients, and fickle investors. The Dutch shop is part of a new wave of independent agencies that believe they can profit from the same market forces that have brutalized the business. And they are challenging the Madison Avenue establishment in New York City, the industry's historic home.

The ad world hasn't seen anything like this since the creative revolution of the '80s spawned such renegades as Fallon, which redefined print advertising with the Rolling Stone Perception/Reality campaign, and Wieden & Kennedy, famed for its cutting-edge work for Nike. Yet those agencies set up shop in Minneapolis and Portland, Ore., respectively. New York embodied all that they thought was wrong with their business.

That's not the way Paul Lavoie, co-founder of Taxi, an agency from Toronto, sees the city. A year ago he and co-founder Jane Hope opened the New York office of Taxi because they wanted to be in the heart of their industry. "New York is where advertising was really created," says Lavoie. Since then, they have won $80 million in business from Fox Sports, CSTV, and Amp'd Mobile, a cellphone provider that is focusing on broadband entertainment. Taxi's "Try not to die--Amp'd Mobile is coming" is a showcase for the agency's edgy cross-media fare. It includes TV spots, guerrilla marketing, faux web ads for secondhand mountain-climbing gear, and posters with the arresting image of a man urinating on a plainly marked electrical fence. "They've been amazing," says Scott Anderson, Amp'd Mobile's senior vice president for marketing. Taxi is also working on projects with several big clients who can't be named because they are, in effect, cheating on their agencies of record. "There are a lot of pieces falling off the train of the big agencies," says Hope. "It may sound vulture-like, but we are picking up a lot of those pieces."

Then there is the New York office of Mother, an agency that started in London. It is run by Linus Karlsson, Paul Malmstrom, Andrew Deitchman, and Rob DeFlorio, four guys who would rather figure out ways to crack people up with straight-out-of-left-field ads than pontificate about the state of the industry. Since they opened in 2003, Mother New York has turned down business at times to stay true to its rebel creed. "It's like the Wild West out there," says Malmstrom. Nevertheless, Mother has done terrific work for TBS, Milwaukee's Best, and Virgin Mobile. The agency created Target's television spots directing viewers to a website it created that offered customers a choice of wake-up calls on the morning of the retailer's post--Thanksgiving Day sale from the likes of Heidi Klum, rapper Ice-T, and Darth Vader. Target was bombarded with requests from shoppers who actually wanted to be telemarketing victims.

Accompanying these foreign agencies is a host of small New York startup agencies like Anomaly, Toy, and Amalgamated that have won accounts from large clients including Coke and Unilever. Like Taxi, Mother, and StrawberryFrog, they say they are better qualified to solve clients' problems in this age of media fragmentation because they don't have the costly infrastructure, like big TV production departments, of their larger competitors. "The fact is, our business has always been only about two things: ideas and people," says Anne Bologna, who co-founded Toy in September after being president of Fallon's New York office. "If you have an idea big enough to move the client's business, that's enough." In October the tiny agency won Oxygen Media's $20 million account.

What do people at big agencies say about these upstarts? A year and half ago they spoke about Mother and StrawberryFrog as if they were daft out-of-towners who would soon have their heads handed to them. Now big agency chiefs are more diplomatic. "I don't think of these agencies as a threat," says Bob Jeffrey, CEO of WPP's JWT Worldwide. "I think of them as a nice addition to the neighborhood. They make the game more interesting."

David Lubars, chief creative officer of Omnicom's BBDO North America, is more pointed. He was recruited last year from Fallon to transform the Madison Avenue flagship best known for Super Bowl ads. "I spent most of my career in boutique agencies," he says. "I loved how nimble and responsive we were. But I also remember the frustration. You don't have the depth of a big agency."

Perhaps it's just something the chief creative officer of BBDO has to say. Every 20 years or so there is a revolution in the ad world, driven largely by new agencies riding a wave of technological change. In the '60s, the golden age of broadcast television, there was a revolution spearheaded by Bill Bernbach, whose agency created the Volkswagen "Think small" and Avis "We try harder" campaigns. In the '80s cable television gave consumers more choice and forced ad agencies to make better spots. It was the heyday of Fallon and Wieden.

Now, once again, technology is upending Madison Avenue. Sure enough, there is a flurry of new agencies--in New York, of all places--arguing that these are not the worst of times, but the best. They are just getting started too. "The doors are open," warns Goodson. "The floodwaters are coming."

DEVIN LEONARD, a senior writer at FORTUNE, can be reached at