Sid Lee's big kick to the cojones

When oddball Montreal ad agency Sid Lee landed international accounts for Dell and Adidas, it looked like the agency was on an epic roll. Then Dell fired them. Is Sid too quirky to go big-time?

The Sid Lee team (Photo: Pierre Charbonneau)

When Bertrand Cesvet threw a party as a kid, he wasn’t worried about whether there would be enough snacks or if the music would be any good. His childhood phobia was always whether anyone would actually walk through the door.

During the last week of May, the 48-year-old chairman of top Montreal ad agency Sid Lee finally put that phobia to rest. He threw a party to beat all parties, and it included such A-list guests as Arianna Huffington, Google CFO Patrick Pitchette, Cirque du Soleil president Daniel Lamarre and former Walt Disney Group CEO Michael Eisner. The eclectic get-together was called C2-MTL, and it included a conference on commerce and creativity. As it ended with a thousand attendees sipping drinks in the golden glow of the setting sun, Cesvet remembers taking a moment to look around and soak it all in. His only thought? “Holy shit, everyone showed up.”

A stone’s throw from the Sid Lee offices near the old port in Montreal, the conference was housed in a warehouse-turned-state-of-the-art-event-space, surrounded by an outdoor plaza fenced in by strategically stacked shipping containers and Bedouin-style tents that doubled as meeting spaces and general chill-out rooms. The fact that people showed up in droves shouldn’t have come as a surprise. Over the past five years, Sid Lee has been on a pretty epic run. It’s gone from a small but well-regarded boutique creative firm servicing primarily Quebec-based clients, to a world-renowned shop working with brands like Vodafone, Qatar Airways, Red Bull and Adidas. The agency had 229 employees in 2008; it has 600 this year, spread across offices in Montreal, Toronto, Paris, Amsterdam and Austin.

The secret sauce attracting the international clients is the agency’s eclectic and multidisciplinary approach to its work, employing writers, graphic designers, musicians, architects, tech engineers and more to solve any number of branding problems. Quebec’s Société des alcools du Québec (SAQ) needs a retail store and mobile app? Check. Amsterdam’s historic Ajax Football Club wants a multimedia museum in its home city? Done. A Rona TV ad campaign? No problem. It’s an approach that over the past few years has become the newest mantra in marketing, all to better get your attention in an overcrowded media landscape where every TV has a fast-forward button and every consumer has an itchy thumb.

With its on-trend strategy, Sid Lee’s future looked filled with balloons and unicorns. But this May, the agency lost computer maker Dell as a global client, forcing layoffs. Still, the agency is pushing its U.S. expansion harder than ever, with plans set to open a New York office by the fall.

That move represents a crossroads for Sid Lee. Can it get beyond the Dell debacle? Or is the darling of Canadian marketing just too quirky for the big time?

Founded in 1993 as Diesel by law student Jean-François Bouchard and graphic design student Philippe Meunier, the agency’s first client was a Greek restaurant around the corner from its makeshift office. (The firm opted for an anagrammatic name change to Sid Lee in 2006 after years of getting confused with the Diesel denim brand.) Now agency president, Bouchard has the wide eyes, easy smile and laid-back demeanor of a man who has always been his own boss. He credits the shop’s design roots with setting the foundation for its approach today. “Design, almost by definition is more multidisciplinary,” he says. “Very early on we wanted to apply our design thinking to advertising. So if we had a restaurant client looking to make new menus, we’d look at it as trying to make a better restaurant, everything from the customer experience down to the takeout menu. And because we decided to put strategy at the core of the company, as opposed to advertising, it became logical for us to extend our creativity out to different fields.”

In 2012, this doesn’t sound revolutionary, and echoes a consensus among marketing experts that the industry needs to move beyond its traditional products and expand into entertainment, retail design and more. But for the mid-1990s, the multidisciplined approach was prescient. For much of the past decade, advertising agencies have been struggling to adapt to changing technology and consumer behaviour. A single-minded focus on media like TV and print is disappearing in favour of marketing messages that reach across media and beyond.

Consider that at the Cannes Lions Advertising Festival in June, the industry’s largest awards show, New York–based interactive agency R/GA won the top prize for its Nike Fuelband. It’s worth noting that the Fuelband is not an ad, but a product. It’s a simple wristband that takes the original Nike Plus running app concept that R/GA developed in 2006 and lets people track every daily activity, measuring calories, steps and timing on the Nike+ online platform. At $150, you’re essentially paying for a wearable sneaker promotion.

Like R/GA, Sid Lee is betting big brands will need increasingly diverse ways of getting consumers’ attention. The agency is staking its future on marketers’ need to tap consumers on the shoulder any way they can, whether through a TV ad, original web content or product design. “We’re not about advertising anymore. We’re about communication and engagement,” says Anthony Kalamut, creative advertising chair and professor at Seneca College “When you take a look at how involved Sid Lee is even in the Adidas stores versus just handing it over to some retail architect, making sure the store itself fits into the overall strategy. That’s how smart brands will operate in the future, looking to agencies for not just ads but actual platforms to deliver their message.”

No other brand illustrates the Sid Lee approach as successfully as Adidas. The agency nabbed global creative duties for the athletic and streetwear giant in 2010 after heading up it’s old school-flavoured Originals line since 2008. Last year, it launched its biggest and most expensive campaign ever under the tag line “All In,” with ads starring a mix of pro athletes and celebrities such as David Beckham, Katy Perry, Snoop Dogg and Derrick Rose of the Chicago Bulls. The agency also released an iPhone application that allows users to take a photo of any Adidas shoe and find the closest store that stocks it. Adidas reported sales of $12.7 billion in 2011, up 14% year over year, its highest growth rate in 13 years.

Nicolas Favre at Adidas France is impressed with how the agency engages consumers. A recent contest in France saw young people scrambling to try on running shoes for a chance to be “kidnapped,” thrown into a van and given a Mission: Impossible–style task by world judo champ Teddy Riner. The prize was the chance to meet Adidas celebrities, and afterward the entire adventure was posted online. The effort logged millions of dollars’ worth of media coverage across France and handed Adidas a 500% jump in interest in the brand’s Climacool running shoes. Lauding their creativity and understanding of young consumers, Favre says, “They have a complete consumer-experience approach from brand activation to retail knowledge.”

The agency’s second major international account win came in February 2011 when Dell, a brand badly in need of a commercial makeover, enlisted its services for the company’s North American consumer ad account. It marked a major coup for the agency, eliciting echoes of “Who?” south of the border, as it beat out a list of blue-chip American competitors. By March, Sid Lee had set up a satellite office near Dell’s Austin, Texas, headquarters and was plotting further expansion into the lucrative U.S. market.

But in May, just 15 months after the champagne corks popped, Dell hit Ctrl+Alt+Delete and handed Sid Lee its first major loss in recent memory, striking a multimillion-dollar account from the agency’s balance sheet and forcing a number of layoffs. The loss came after the marketing team that hired the agency was replaced. Citing a need to consolidate its accounts, Dell decided to move its consumer marketing from Sid Lee to Young & Rubicam, a global agency that already held part of the computer company’s corporate brand business.

When all you get are high fives, it’s easy to forget what a kick to the cojones feels like. However, Cesvet wasn’t wasting any time handing out tissues. “Dell is a bummer. I’d be lying if I didn’t say that,” he says. With his persuasively optimistic tone, it’s easy to see why Bouchard and Meunier convinced Cesvet to abandon his management consulting ambitions and become the agency’s elder statesman in 1997. “It’s the nature of the game. If we want to play it at the highest level and be with the biggest brands in the world and the most competitive set of our industry, these things have to be expected.”

As sanguine as Cesvet is about it, this isn’t a loss to be shrugged off lightly. For an agency with lofty global goals, it could serve as a warning that some of those big (and mostly American) fish it’s after aren’t biting the bait. For its part, Sid Lee’s leadership is confident there are plenty of others who will. Bouchard isn’t afraid to lose clients over his agency’s quirky personality, pointing to world-class agencies like Nike partner Wieden+Kennedy, or Crispin, Porter & Bogusky, which have rolled out award-winning work for Best Buy and Domino’s lately. “If you look at high-performance agencies that have become hot shops, they have stories like Dell every two years,” he says. Wieden lost the Target account in January, while Crispin has lost both Burger King and Volkswagen in recent years. “You try to make sure it’s a great fit, but it doesn’t always work out.”

Vito Piazza, managing partner of Sid Lee’s Toronto office, says the agency isn’t taking its eye off bigger goals. “We caught people by surprise when we got the Dell account. Now we’re seen as a viable option on that level, so we need to continue down that path,” he says.

And that path, in the immediate future, leads through New York City. In the next few months, Sid Lee will open its outpost with a handful of clients, the biggest being Major League Soccer, signed last March.

Sport Chek chief marketing officer Duncan Fulton doesn’t mince words when asked about Sid Lee’s expansion plans. “I think they could be one of the best marketing agencies on the planet,” he says. But the platitudes come with a caution. “There’s a reason why every global agency has tipped over into being so big and bureaucratic that they lose track of what made them successful in the first place. Increasingly, you see big companies bypass the global agency networks and go to boutique agencies like Sid Lee. I don’t know if you can be a 28,000-person boutique.”

Sid Lee creative chief Meunier, whose look is less Don Draper and more a Francophone Jeff Spicoli, doesn’t see growth as a threat to the company’s creative foundation. “I think the bigger you are, the more power you have to be even more creative,” he says. “Look at Google and Pixar. Two huge but very creative corporations.”

The company’s recent work may hold some hints about what it intends to peddle beyond our borders. At the same time as the Dell deal, long-time client Cirque du Soleil bought a “significant minority equity stake” in Sid Lee. Cesvet sees a huge opportunity in the arrangement. Stripped of all its acrobatic aesthetics, what Cirque adds to Sid Lee are the world-class capabilities in theatre production, touring, and engineering of the largest live show producer in the world.

The closest incarnation of this vision came at halftime of the 2012 Super Bowl, when Madonna performed in what can loosely be described as a This-is-Sparta-techno-hot pants-fiesta-dance-off. “You had Madonna decked out in Adidas, performing in a show produced by Cirque du Soleil,” says Cesvet. “What we intend to do now is take that model and bring it to many brands around the world to create a connection with consumers through live entertainment.”

Even without Madge and her faux-Centurion army, this is an intriguing prospect. Live branded entertainment can live well beyond the original event online and, in the case of Red Bull’s Crashed Ice events, actually be sold as television content. From a revenue perspective, it moves Sid Lee from a traditional client fee structure to shares in tickets, merchandise and licensing. It plays into a larger plan to get beyond fee-based work and further into other intellectual property plays like product design and events like C2-MTL.

But can this approach work with buttoned-down brands less adventurous than Adidas or Red Bull? The Dell loss suggests the answer is no, but Sport Chek’s Fulton certainly thinks so. He hired Sid Lee late last year just as Canadian Tire was completing its $771-million takeover of Forzani Group, of which Sport Chek is the crown jewel. The company plans to overhaul the 139-store chain and grow it by 100 stores over the next two years, with Sid Lee leading everything from retail design to social media efforts. Fulton says the agency goes beyond the traditional relationship to become immersed in every aspect of company strategy. “They’re a strategic business adviser that happens to be great at marketing, advertising and creating emotional connections with consumers,” he says.

Back at the C2-MTL conference, the last speaker was Francis Ford Coppola, who has demonstrated his own multidisciplinary approach to creativity by parlaying his work as a filmmaker into a “lifestyle brand” that includes cafés, resorts, a literary magazine and a winery. After the Godfather director’s presentation, everyone streamed out into the plaza’s evening air for the finale party featuring a DJ set by Moby.

With the event winding down, Cesvet basked in the glow of pulling the conference off. “This was a brain fart we had a year and a half ago, and here it is and it worked,” he says. “It’s a big testament to what’s ahead. Now when we throw a party, we know people show up. People will show up.”