• by Joe Mandese  @mp_joemandese, April 1, 2009

I’m sitting in a conference room at 11 Madison Avenue, a facility that has become part of a new wpp laboratory for inventing the “agency of the future.” At least that’s what its chief scientist, Torrence Boone, is telling me, as he scrutinizes a series of boards surrounding us on the room’s walls.

The boards, in effect, are the story of Enfatico, an agency born of a unique collaboration between wpp and personal-computer marketer Dell, one that rethinks the entire organizational structure and client-service agency model invented by Madison Avenue more than a century ago. wpp couldn’t have picked a better person to lead that charge. Before becoming ceo of Enfatico, Boone was a top executive at management consulting firm Bain & Company, and spent years trying to influence new organizational structures and cultures among advertisers and agencies on the outside. Now he’s working from the inside out.

“Our business is changing, but the agency model hasn’t,” Boone says, pointing to one of the wall boards, which shows a mashup of accelerated changes in the media marketplace. The composite of tables and images illustrates the rapid infusion of new media, new cultures and new markets that the classic Madison Avenue agency was never designed to deal with.

One of the tables shows the time it took for media platforms to achieve a critical mass of 100 million users —it took 20 years for CNN, but less than two for YouTube. The point, Boone says, is the curve is accelerating, and the reinvention of marketing-services models needs to accelerate along with it. Another shows a list of 20 key international markets, but unlike the obligatory Western Europe and so-called bric (Brazil, Russia, India, China) ranking, Boone’s list includes relatively small countries he believes will be big factors in the next several years, including Turkey, Nigeria and the Philippines.

But the thing that gets him really enthusiastic isn’t any of the data points on the board, it’s an image of people rocking out at a concert. The picture, which he took himself at a concert sponsored by YouTube, is important, he says, because the event had a level of audience involvement that surprised even him. Surrounding the concert hall were YouTube uploading stations where the concertgoers were encouraged to post their own video coverage, live, as the band performed on stage.

At about this point, an aide enters the room and whispers in Boone’s ear; he turns and sheepishly asks if it’s okay if he takes a brief call. “It’s Michael Dell,” he lets slip. The call proves to be not so brief, so we break and decide to regroup a few weeks later.

How Soon Is Now?

Like the mashup media world it was spawned to manage, Enfatico began as a cut-and-paste job, drawing experts and resources from the rest of the wpp organization: a little bit of cutting-edge interactive design agency Schematic, a few parts of digital media shops like MEC Interaction, a good dose of branding agencies like JWT, O&M and Y&R. But in its short life, Enfatico has built its own organic organization of creatives, account people, media people, research and analytics teams, and a robust infrastructure of production and resources scattered around the world.

During our second meeting, in which Boone is once again dressed all in black, he explains that Enfatico truly is a global organization, and that part of its mission is to source the best possible resources and capabilities from the best geographic “markets of excellence.” So when Enfatico needed to create a digital production facility, it chose Bangladesh, where the labor pool is cheap, fast and good. When it needed to build a public relations team, it chose the pr-savvy San Francisco market. When it was looking to build an in-store marketing team, it picked Beijing, which is innovating the development of so-called shopper marketing.

The knows-no-boundaries orientation of Enfatico is part of what makes it different, Boone says, and it is creating world-is-flat breakthroughs, including Dell’s first ever small-business marketing campaign, which was conceived, developed and launched in China, and subsequently rolled out to other major markets, including the United States.

Not everyone is convinced. Pronouncing yourself the reinventor of the agency model provokes some reactionary responses, especially from critics at rival agencies and in the trade press, who question Enfatico’s vision and vitality. In February, the company announced plans for a restructuring that would reduce 8 percent of its global workforce, all before Enfatico officially turns one year old.

The reduction, of course, wasn’t something Boone or wpp chief Martin Sorrell could have anticipated when Enfatico was conceived, but it is consistent, in a way, with Enfatico’s spirit of adaptation and reinvention. If the economic environment surrounding an organization shifts midway through its development, it had better adapt quickly, Boone suggested in a memo that was made public. “The best organizations come together during times of difficulty and often emerge stronger when the storms pass,” he wrote.

The good news is Enfatico was founded with the premise of operating under the most economically efficient model — for the company, and its clients. Yes, clients, with an “s.” Even though it began as a collaboration with Dell, Enfatico is actively pitching new business from other marketers, and its goal is to grow its business by growing Dell’s and by attracting other marketers intrigued by a different approach. It’s a challenging goal. In the most recent quarters, Dell’s market share has ebbed, and big branded competitors, like HP, have been gaining on it.

Special Sauce

This time our meeting focuses on Enfatico’s secret formula — make that formulas. We are joined by David Meer, a long-time research and analytics guru who is Enfatico’s chief analytics officer, and is one of the rock stars inside the organization, because a part of Enfatico’s core is that superior analytics will lead to superior outcomes.
“It’s like the CBS show Numb3rs,” Meer says. “The idea is that everything has a numerical explanation.” Meer and Boone believe that if you harness the power of advanced computing to divine insights from the numbers, marketing organizations can scientifically control the outcomes of their campaigns.

Enfatico has built an analytics platform that continuously tracks more than 50 different business metrics across an array of more than 100 desktops deployed throughout the organization.

But unlike a lot of organizational systems, Enfatico’s doesn’t have any dominant approach to analyzing or modeling the data it uses to build its campaigns. Instead, it is constantly assimilating new approaches — many from different industries that have never before been applied to the field of marketing.

Currently, Enfatico’s analytics suite includes traditional marketing-science approaches such as marketing-mix modeling, but it also incorporates neural networks, multivariate statistics, and a little ditty known as “adaptive, agent-based modeling.”

Asked to explain what adaptive, agent-based modeling is, and how it works, the Enfatico team focuses instead on its novelty, noting that it is the same technique “used by Boeing to optimize aircraft assembly.”

What do the construction of jet wings and fuselage have in common with marketing? Boone and Meer wouldn’t say, but they allowed that their mission is to appropriate the best nontraditional forms of modeling and analytics, and to apply them to marketing when they are most appropriate.

Meer says he has also begun dabbling with modeling systems that come out of the pure physical sciences — like thermal dynamics — because it may help explain marketing phenomenon that people hadn’t understood before. Thermal dynamics is the study of how pressure and heat affect things in the physical world, and Meer says there are ways of using that process in advertising, too.

This is a leap from the early days of advertising science that relied more on social sciences like psychology, sociology and anthropology, which sought to understand why people do things. The physical sciences, Meer says, allow marketers to analyze the free flow of data on actual consumer behaviors to understand what they did.
Enfatico’s systems try to leverage both, to understand the how and the why, because in the end, it’s still the great, persuasive storytelling of advertising creative that triggers much of that behavior. The difference, Meer says, is “we have to take leaps of imagination. Not leaps of faith.”

The ability to look at both of these worlds — as well as worlds entirely outside the traditional realm of marketing science — comes down to the ability to leverage advanced computing, Meer says, noting that the power is finally here to analyze data in “real-time, across micro-segments of the population, and to tie their behavior directly to actions that generate revenue.”

At about this point, Boone and Meer reveal their ultimate weapon, and the only one, they claim, that could make such a myriad of systems work for a marketing organization.

“We call it an automatic modeling appliance,” says Meer. “Think of it this way — the appliance models the models to find out what will get the best results.”

In effect, Meer says, the appliance is constantly computing and analyzing simulations of marketing phenomenon — using the array of modeling techniques — until one reveals some unique market insight that could be understood and leveraged in some new way.

The thesis,” says Meer, “is that we have the ability to simulate reality.”