It’s late afternoon, and several Hill Holliday staffers are sitting on a couch, sipping Pabst Blue Ribbons and staring at a large television screen covered in tiny dashboard gauges. Dials wave back and forth and the team — a mix of Web designers, app developers, and the ad agency’s other creatives — looks on, mesmerized.
The dashboard, known as BrandFeed, allows companies to track their social media campaigns on Facebook and Twitter in real time, helping them to determine how they can best allocate their advertising dollars, based on how well they’re being received online.
It was built by the group on the couch, which is called Project Beacon and functions as a startup within Hill Holliday’s walls. The members have been testing BrandFeed internally since December, but last week they began allowing anyone interested in using the tool to subscribe to the service. (Rates start at about $9 a month.)
For more than four decades, Hill Holliday has been in the business of selling ideas. But Project Beacon has set out to upend the role of the traditional advertising agency: It’s building products. Executives say BrandFeed’s launch could foretell a shift in the agency’s business model.
It is no secret that the notion of a perfectly crafted 30-second television ad is increasingly irrelevant in the digital age. But Project Beacon isn’t solving that crisis. The mission is to experiment with the latest technology, regardless of how it may translate into a campaign. So every month for the past year, Project Beacon has created an app or a product, many of which may seem a bit out of step with the goals of one of the nation’s largest advertising firms, whose accounts include Dunkin’ Donuts, Bank of America, Major League Baseball, and John Hancock.
In the fall, the team worked to install iBeacons throughout the Public Garden in Boston so that information could flow instantly to those who have downloaded the park’s new app. It built a program, Glitch, that allows employees in their office to text the IT help desk and get automatic updates whenever the printer has issues. An app called Frenzy sends text messages throughout the office whenever there’s free food in the kitchen.
For those who have long watched Boston’s advertising landscape, Hill Holliday’s decision to move into products is a chance to play catch up. Many legacy agencies were slow to see the potential of social media and have been scrambling as upstart, more nimble firms create Twitter, YouTube, and mobile campaigns.
“The smart agencies have learned that they have to disrupt themselves before they get disrupted,” said Edward Boches, a longtime ad executive at Mullen who now teaches at Boston University. “While not all clients move as fast as the technology allows them to, they certainly want to think that their ad agency is on the cutting edge.”
Adam Cahill, Hill Holliday’s chief digital officer, said it’s time to change the traditional model under which agencies are paid for the hours spent on a project, regardless of its long-term impact.
“As the world becomes increasingly digital, we’re trying to figure out how we can evolve our business model, as well, and building products through Beacon is one of our first experiments toward a goal of getting paid for value, not hours,” Cahill said.
Project Beacon has evolved in fits and starts. It was launched in 2011, with the goal of partnering ad-tech startups with their clients. But after those relationships failed to prove fruitful, Hill Holliday pivoted — to use the startup world’s parlance — and decided to develop its own tools and, more importantly, bring them to market.
The group’s experiments are as much an attempt to understand technology as to anticipate the needs of clients: A snack-alert app may seem like a lark, but who’s to say Dunkin’ won’t eventually want an app for every time someone brings Munchkins to the office? The release of products means that Hill Holliday can also expand its reach.
“I think it really represents a change in what agencies can do,” said John Running, who oversees Project Beacon as the agency’s director of innovation and technology. (He often wears a lab coat to signify his role as the incubator of new ideas.)
Having incubators like Project Beacon is also a way for agencies to attract talent, particularly as they find they are losing Web developers and designers to tech startups that are willing to pay higher salaries and provide less cutthroat, competitive environments.
“They need to do things to make themselves more attractive to young people, as they’re too much of a dinosaur,” said Donald Hurwitz, a former executive at Digitas and Arnold Worldwide who teaches advertising at Emerson College.
Hurwitz said he finds the core concept of BrandFeed “pretty mundane,” but in the larger context, he sees the move as the equivalent of Hill Holliday’s unfurling a banner reminding their competitors: “We’re here.”
Yet the move didn’t seem to rattle the current team at DigitasLBi, which specializes in digital advertising campaigns and has close relationships with startups and the venture capital community.
“I applaud the effort and I’m glad they’re flexing those muscles,” said Norman de Greve, the president of Digitas’s offices in Boston and Detroit. He said whereas the traditional Don Draper-esqe idea man used to be the power player, the most creative potential is increasingly being seen within the digital teams.
Still, he said, just because you create digital products doesn’t mean they will make a difference.
“This idea of agencies creating products for people to pay for is not new; the question is when do you decide to ask for money and when you do you say it’s a way of providing better work?” he asked.
Dressed in his lab coat, Running is quick to admit that BrandFeed and Project Beacon are part of a grand experiment, and it’s still too soon to tell whether they will affect Hill Holliday’s bottom line.
Still, he believes they have the potential to shake up the industry. And he’s not alone.
“It’s the fact that the two-ton gorilla has said, ‘Yes, this needs to be part of the mix,’” Hurwitz said. “God bless them for doing it. If Holliday wants to make a splash in this area, they have the pockets deep enough.”
Janelle Nanos can be reached at email@example.com. Follow her on Twitter @janellenanos.
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