Agency Spy

We have a winner — Avenue A - Razorfish.

The prize? A brand new digital McJob!

Yes… that would be Mickey Dee’s UK digital account for the next three years or so (so they say that is — as they also say, given the fickleness of clients these days, nothing but death & taxes is assured.)

They battled AKQA to the proverbial death and emerged victorious for the account that is expected to be worth about $10-15 million yearly — big bucks in the digital sense (ATL CEOs probably spend more than that on their expense accounts.)

It will include all the online advertising, the development of a new web presence, and the potential development of digital kiosks to replace a few cashiers and make things go faster as you can ponder if you want the chocolate shake or tub of Coke to go along with that Egg McMuffin or Filet-o-fish.

The fast-food giant did not have an incumbent digital agency for its consolidated business although Avenue A - Razorfish has handled work for the restaurant chain in other markets. Leo Burnett will continue to handle McDonald’s above-the-line advertising account and The Marketing Store will handle its below-the-line account.

In the year ended 30 September 2007, McDonald’s spent £34 million on advertising in the UK with online accounting for £3.6 million, according to Nielsen Media Research. This digital spend is expected to almost double over the next year as the company plans to invest some £400 million into making its European businesses more locally relevant.

At the start of the year the fast food giant reported net profit of £640 million for the last quarter in 2007, fuelled by double digit growth in Europe.

(ed note: and this begins today’s int’l digest — because there is fuck all happening stateside these days it seems. We need a good old fraud to be exposed — OK…significant fraud that is… none of this everyday shit that agencies pull on an hourly basis — or someone dig up Leo Burnett and/or David Ogilvy and see what their take on the state of current ad industry is.)

We’ve heard some cavils from advertising folk about how disappointed they were at this year’s SXSW events. The common complaint was that not enough agencies were involved at large - sponsoring panels, holding parties, talking the talk. Basically, the thought leadership passed on whole shebang. For those of you living under a rock, SXSW is more than a showcase for rockers and film heads. The event also holds an interactive schedule chocked full of useful panels such as “What Teens Want Online & On Their Phones” and other talks that might not be so handy to ad folk like “Quit Your Day Job and Vlog.”

Speakers at various panels (oddly mostly on the film side) included: Hank Blumenthal - Schematic; Peter Cole - AKQA, Joesph Crump - Avenue A/Razorfish; and Ian Schafer - Deep Focus.

Sounds like a bummer, right? Our guess is that traditional agencies don’t consider SXSW a serious venue to get to the down and dirty. The staffers that do go are probably thinking -”Hell, yeah, I’m going to South By… I’m gonna get crunk. Catch Band of Horses and maybe parlay my way into a new gig at Schematic.” Oh! Avenue A had a party, which looks, you know… like an advertising party. Rah.

More interesting is the video above of the interview between Mark Zuckerberg and Sarah Lacy that turned into a shit show when “audience members, apparently tired of constant interruptions by Lacy and references to her own projects in the interview, essentially said they weren’t going to sit for such lame questions and demanded to ask their own.” Scroll to about six minutes and fifteen seconds when it really gets interesting.

The staffers at Avenue A/Razorfish have being sharing the SEC filings for the Microsoft buy-out. They’re a little shocked. Especially at CEO Clark Kokich’s big pay day. We expected that management would make a killing off of the sale and Clark’s work is stellar, but the figures? They’re off. The. Hook. Meanwhile, staffers can’t even get the good benefits package.

Being the industrious little bees that we are, we decided to check out the SEC filings to see what all the hubbub was about. You can view the filing yourself here. Who says advertising doesn’t pay?

Cash-Out of Vested Options

The following table shows the total number of vested stock options held by our executive officers and all options held by directors, as of June 20, 2007 (with vesting assumed to continue, and projected, through August 9, 2007 and applying the vesting provisions of Mr. McAndrews’ employment agreement), that are expected to be cashed out in connection with and as a result of the merger (without considering the options set forth in the following section “Cash-Out of Equity Awards Whose Vesting is Accelerated With Consent of Microsoft”) and the amounts expected to be received by such individuals in connection with the cash-out of such options. All dollar amounts are gross amounts and do not reflect deductions for income taxes and other withholdings. The options have exercise prices ranging between $0.6667 and $33.22 per share.

Cash-Out Treatment of UnvestedEquity Awards Whose Vesting is Accelerated with Consent of Microsoft

The following table sets forth for each executive officer the expected number of unvested outstanding options as of August 9, 2007, with their current exercise price, whose vesting is expected to which will be accelerated, as consented to by Microsoft, as described below in “Interests of our Directors terminated and Executive Officers in the Merger — Merger and Post-Merger Vesting Acceleration” and that are expected to be cashed out as a result of the merger, and the amounts expected to be received by such individuals in connection substituted with the cash-out of such Microsoft options as described in “The Merger Agreement — Effect on aQuantive Stock Options and Restricted Stock.”

Microsoft bought interactive agency Avenue A/Razorfish just this past May. It’s been pretty much smooth sailing as far as we know. Except that… agency employees recently found out that they won’t be sharing in Microsoft’s benefits package. Meanwhile, their counterparts in aQuantive’s other divisions, Atlas and DRIVEpm, will get to enjoy the 100 percent employer-paid health insurance.

Avenue A President Clark Kokich told employees that: “[W]e believe it is no longer tenable for us to attempt to treat all parts of our business the same. It would mean causing AA|RF to conform so closely to the software and media model as to make it non-competitive within its own industry.”

The Seattle Times reported that: “Early next year, Avenue A will begin designing a new compensation package, tweaking its approach to salary, benefits, bonus, titles, levels, tools, career development and performance management.The new package will take effect July 1, 2008, the beginning of Microsoft’s fiscal year.”

That kinda sucks.

Microsoft has paid $6 billion for aQuantive this sunny Monday morning. Microsoft has the ambitious goal to rival Google and Yahoo for a share of the online advertising business. “Our goal is to be No. 1 or No. 2,” Kevin Johnson, president of Microsoft Corp.’s platforms and services division, said in an interview last week. We bet they pick off Yahoo, but no way are they going to catch Google. aQuantive is the parent company for a quite a few successful digital marketing brands including Drivepm, digital solutions company Atlas and independent interactive agency freak flaggers Avenue A/Razorfish. According to McAndrews, the company will operate “at arm’s length.” The agency will make decisions based on marketer’s needs, not on its ownership by Microsoft. Yeah, right.

Avenue A/Razorfish bumped up president Clark Kokich to CEO right yesterday before the agency and its parent company aQuantive, gets swallowed up by Microsoft in their recent $6 billion dollar deal. “We’re very optimistic we can manage the need for impartiality,” Kokich said. “We’ve done that for years from within aQuantive.” Kokich has been at the interactive shop since 1999. Avenue A/Razorfish has seen profits rise recently with international expansion through acquisitions in the United Kingdom, Germany, Australia, China, and most recently in Japan through a partnership Dentsu.

Avenue A/Razorfish may be wavy the freak flag, but who cares when you’re kicking ass and taking names? You’ve got to admit, Kokich looks a lot like William H. Macy. Anyone know what kind of boss Kokich is? Is he qualified to lead the charge into Avenue A/Razorfish’s future? Email us at agencyspy at mediabistro dot com

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Or, Agencies Can Prove They Give A Crap About Mother Earth

Holy Beejesus! You gotta watch this recruitment video from the very decent interactive agency, AvenueA/Razorfish. It’s like watching a student art film. You know - the kind that makes you cringe a little bit because the poor kid is trying too hard to be irreverent and yet, deep at the same time and you just want to be like, “Dude… put the freak flag down. We all know you’re smart and different. It’s okay, man. It’s gonna be okay.”

We once had a job interview at AvenueA. We sent the obligatory thank you note, but when they called us in for the second interview, we politely declined. There was something about that office. Everyone seemed lovely, but somehow a little off. Watch the video and you’ll know exactly what we mean. Hey - this might be just what you’re looking for in an office environment. Plus, you know, they do create some excellent work.

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