• by Adam Herman , April 28, 2003

You can now count on one hand the number of major independent interactive agencies still based in San Francisco, one of the cradles of online advertising. Exile on Seventh, along with a few of its peers, is trying to keep this tradition alive.

"Proudly independent" is how Alan Burgis, president of Exile on Seventh, describes his 24-person, $35 million agency — but then again, this shop isn't exactly about convention. "The name of this company comes from the marriage of two thoughts," says Burgis. "First, we selected 'exile' because we didn't want to be thought of as mainstream. We didn't want to do business the same way. We want to actually deliver on the cliches that permeate this business. Second, we took 'Seventh' from the street that our former offices were on when we were called McMahon and Partners." The agency currently is housed on Main Street, but calling it 'Exile on Main Street' would probably result in a few angry letters from the Rolling Stones.

Burgis, who was born in Sydney, Australia, has experience on two continents as an agency and marketing pro. He was managing director of McCann-Erickson, chairman of FCB, and CEO of Euro RSCG. Prior to that Burgis spent four years at McCann-Erickson in Los Angeles as both worldwide account director and director of account management, and was EVP and director of account management at GMO in San Francisco. He also spent some time on the client side with stints as marketing director of Frito-Lay and Bristol-Myers in Australia.

Despite a rough turn for the ad business in 2002, Exile on Seventh had a pretty good year. In the last six months alone, it picked up several new accounts, including 21st Century Insurance, MyFamily.com, Quote Advantage, Master Replicas, and the small business division of Wells Fargo. These wins, plus ongoing work from Osmotics, eBay, Mott's, EarthLink, America West Vacations, Nestle, CNNsi.com, and Heald College, have helped the firm turn a profit every year since its launch in 1996. "That's something IPG, Omnicom, and WPP combined haven't been able to do," Burgis says with a smile. "Our clients are in the black, and I think clients like dealing with agencies that are in the black too."

However, the decline of the ad business the last two years did have an effect on Exile on Seventh. Prior to this, the agency was doing a lot more traditional creative, media planning, and media buying. Since then, Exile has made a "strategic retreat" to its online roots to provide its clients with mainly interactive services. But these are very deep and healthy roots. Exile on Seventh is one of the foremost buyers of online media and prides itself on its analytic approach to buying. "Our agency is set up in a team environment," says Burgis. "Each team has a media planning, a media buying, a creative, an account management, and an analyst person. We also have specific teams to make the online buys. This is a model that big agencies use for buying TV and that most online shops don't follow."

What really sets Exile apart from other agencies is its fanatical approach to accountability. "We have a commitment to the competitive advantage of optimization," say Burgis. "Other clients and agencies often don't understand the world of accountability like we do. Every step of the process — for both media and creative — is analyzed and adjusted to make everything from branding to strict ROI campaigns work best. We can adjust every aspect on a daily basis to leverage the advantage of online."

And it is Exile's analysis department that is responsible for the campaign accountability. "This department gives us a huge competitive advantage," says Greg Pomaro, group media director. "It is important to have an analyst at the table to lend insight into the endgame and how to get there. However, they are involved even more so in the front end as the back end. They apply models and proxies to track ad performance to revenue metrics. They tell us why something happened, not just what has happened — everybody does that — and what the implications are."

This analytical approach, combined with Exile on Seventh's "test and learn" philosophy of continuing to test new sites, dayparts, targets, creative, and agreements, make it a formidable player in the marketplace. "We take the initial results of each campaign and divide the sites into thirds," says Burgis. "We give more money to the top-third, best-performing sites, work to improve the middle-third sites, and kill the last third, or at times give it one final chance to improve."

A campaign that highlights Exile's media buying prowess is the one it develop for the Microsoft Windows XP launch. McCann-Erickson, Microsoft's lead agency, asked Exile to partner with them to handle the online portion of the launch. The challenge, according to Burgis, was to create a groundswell of demand and momentum to overcome the inertia of general satisfaction with current PCs, redefine what a PC can do, and think 'outside the box.' This was all to be accomplished on a budget that was less than $2 million.

Exile's solution was to create a "big splash" using rich media and one-of-a-kind units to showcase the unique interface of Windows XP. The agency purchased space on CNET, USAToday, Ask Jeeves, and MSN using only large real estate placements — no banners were on the plan. Add Exile's typically aggressive negotiating posture and the 4-week campaign was a success.

A post-branding study by Millward Brown showed a 13% average increase in aided brand awareness, 27% average increase in advertising awareness, and 14% increase in usage and purchase consideration. Finally, the campaign was voted one of the 10 best online campaigns of 2001 at the 2002 Online Advertising Summit in New York.

Exile provides a full range of strategic services including strategic consulting, online and offline media and creative development, direct marketing, promotions, collateral production, ROI optimization, and relationship marketing.