Flat Earth: Online Marketplace OpenAd Has the Potential to Disrupt the Global Ad-Agency Model
This summer, executives from Gillette's Puerto Rican division heard pitches from creatives in 21 countries for a campaign to persuade the island's men to trade in their disposable razors for the Fusion shaver. Among the winners were a Slovenian student, a British photographer and an American creative director, all of whom based their submissions on an initial idea from a small agency based in India.
OpenAd.net is an online marketplace where advertisers and agencies have access to a global pool of creatives.
The pitch, despite its strong international flavor, didn't involve any jet-setting or big-agency boondoggling in far-flung lands. It all unfolded over a website called OpenAd.net, a Slovenian-based online marketplace where ad and design ideas from about 9,000 creatives worldwide are bought and sold. Since it opened for business past year, OpenAd has served European clients, but a trans-Atlantic expansion is under way. The service is quietly being tested by major U.S. marketers such as Gillette parent Procter & Gamble and plans to establish a physical presence here in coming months.
Open market
If it's successful in penetrating the biggest ad market, OpenAd will be yet another potential disruption to the global ad-agency model, and one a long time coming. A dozen years after the internet gained mass appeal, OpenAd represents the ad industry finally taking advantage of flat-earth economics and communications realities to solve one of the marketing business' biggest challenges: finding ideas. Ad agencies once had a lock on that job, but a more complex media world has challenged traditional assumptions, meaning that all manner of interlopers, from media sellers to regular consumers, are now providing grist for the idea mill.
This kind of online marketplace isn't going to replace Madison Avenue's giants. It simply doesn't offer the strategic guidance, account management or executional capabilities agencies have, a fact that one of its founders, Katarina Skoberne, readily owns up to. "In an ideal world," she said, "agencies will use OpenAd on behalf of clients."
Just how well reality measures up to the ideal should reveal itself in the next few months, as OpenAd establishes a beachhead here with an office in New York and, further down the line, one on the West Coast and a third in an undisclosed location.
Russel Wohlwerth, principal at the consultancy Ark Advisors, said the diversity OpenAd affords could be a boon to marketers trying to get close to pop culture. "Agencies can be way too ivory tower," he said. "This is a chance to get close, tap into an incredibly diverse group of people, not just ethnically and racially but in terms of their backgrounds."
Advertisers ready to bite
Agencies are, for many good reasons, protective of their turf as brand stewards and often have trouble collaborating. Advertisers might be more receptive. Ms. Skoberne said the company has already presented twice in front of Association of National Advertisers groups and that several marketers, including automakers, retailers, and food and beverage companies, are kicking its tires.
What they'll find is a massive trove of galleries maintained by freelancers and agencies who register with the site. The service is free to the creatives, but marketers pay to join, and pricing on the ideas, which are vetted by an OpenAd team, is variable. Gillette, for instance, paid the winners of its pitch $1,000 each.
But when marketers don't specify price, the creatives can suggest their own terms. Arriving at price range initially was difficult since ad agencies are usually paid for their man-hours, Ms. Skoberne said. OpenAd, however, has worked to develop pricing guidelines based on the size and power of the market the work will run in, from between a few hundred dollars to more than $100,000.
Katarina Skoberne, one of OpenAd's founders, hopes agencies will use it on behalf of clients.
Marketers can purchase ideas or submit briefs of their own and choose from ideas that it inspires, which is what Gillette did to win converts among its Latin American audiences. The razor maker opened a pitch that was eventually won by Live 1, an Indian agency that came up with the idea "She knows the difference." Gillette then went back to the OpenAd well to get guidance on how the idea could be fleshed out in four different media: TV, print, promotions and interactions.
An unconfirmed report in India's Business Today said the concept had also been licensed for the U.S. market. A P&G spokeswoman didn't respond to an e-mail request for comment, and Ms. Skoberne declined to comment on the Gillette pitch.
Outsourcing?
For creatives in many markets, the upper end of the OpenAd fee range would be an incredible windfall, and a labor pool so intensely international begs a question: Do marketers, especially bottom-line-driven organizations, use OpenAd to outsource labor to cheaper workforces, such as India or Eastern Europe, instead of for its polyglot qualities?
Ms. Skoberne said the company has been approached by procurement types but defended that breed of executives, combating stereotypes that they're mere cost-cutters and are really "looking for ways to add value." Mainly, she said, she's dealing with marketing departments eager to be free of geographical constraints. About 20% of OpenAd's creatives are from Latin America, 15% from Asia, 32% from continental Europe, 20% from the U.K., and 6% from the U.S. and Canada.
The other potential entanglement is quarrels over intellectual property. A formal dispute over rights has yet to arise, but Ms. Skoberne said the company tracks the work on the site closely to make sure no one's ripped off. She said there's also a fair amount of teaching going on as well.
"It's such an unpopular subject," she said with a laugh. "But I think now we probably have the most litigious bunch of creatives you've ever seen."
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