We’re not in “Mad Men” anymore.

On the eve of Fred/Alan’s closing in May of 1992, one of our biggest fans in the press, Adweek columnist Richard Morgan, interviewed us about what he saw as a disheartening event.

ADWEEK
May 1992
Morgan at Large
By Richard Morgan

MTV AGENCY ELECTS TO DIE BEFORE IT GETS OLD

Fred/Alan, the New York agency behind the MTV look, is closing down this Friday for a myriad of reason. C-founder Fred Seibert found himself too interested to reject all nonagency opportunities, such as the president’s job he recently accepted at Hanna-Barbera. Partner Alan Goodman, already doubling as the executive producer of the month-old Hangin’ with MTV show, has other projects as well. Then, too, Fred/Alan had a knack for winning high volume assignments from low-billing clients.

Mostly, though, Fred/Alan is closing because the agency business did not fulfill its promise — as advertised.

“About a year ago,” Seibert explains, “we can to realize the business we believed existed —you know, the business popularized in the lore and myth of advertising— was gone. We realized that in no way are agencies marketing partners anymore; they’re creative vendors.”

“And as an old-school agency,” partner Goodman interrupts, “we no longer fit in. We’re more the type that works so closely with clients we help invent their products. Even diseases, like athlete’s foot, used to be created by agencies.”

Everybody misses the good ol’ days, but the exit of Fred/Alan, whose oldest partner is 40, is particularly disturbing. After working as the advertising department at MTV, Seibert and Goodman spun themselves free. They were at once seduced by their association with agencies while at MTV and intrigued by what they perceived to be a wide-open niche. Campaigns fo Barq’s, Swatch, Buf Puf, and Nick-at-Nite followed, promising their shop a veritable lock on the youth market. Fred/Alan’s youthful orientation was so convincing that three years ago I wrote:

“It’s surprising something like [Fred/Alan] didn’t happen sooner… While boomers continue to move through life’s timeline like the proverbial pig in a python, the original TV generation gives way to other TV generations. They’ll have taken over, no doubt, at a time when big agencies are still stuck with leadership weaned on print.”

I was, at best, half-right. As for the industry at large, Fred/Alan sees total denial. “Until two years ago,” Seibert says, “the TV networks paid the same exorbitant amounts for their shows and ordered the same limos. Then they woke up and realized their world didn’t exist anymore. Well, the agency business is going to wake up and realize that it, too, has been pretending.”

Such is the future, as seen by Fred/Alan. It differs from conventional wisdom in that it attributes Madison Avenue’s glorious past to a dearth of marketing skills at the client. It’s rooted in a time when clients consisted of sales-and-manufacturing teams that let their agencies run wild. That all changed in the 60’s, however, as clients took on marketing responsibilities themselves. “They no longer entrusted such an important function to an outside party,” Seibert says.

Seibert contends the change was hardly noticed, obscured in part by the 60’s creative revolution. Besides, who cared when the explosion in television rates served agencies well as it served the networks? Agencies took marketing direction from clients almost as gladly as they too commissions.

Somewhere along the way, Seibert says, agencies became “no different than a free-lance writer/art director team. The client set a strategy and gave it to them, and they fulfilled it. If the client didn’t like how they fulfilled it they gave it to another team. Then another. But that’s how a real partnership works.” The agency/client relationship has since taken on so many vendor-like traits, Seibert adds, it’s completely acceptable to “blow an agency off just because it doesn’t take you skiing.”

That’s not to say there weren’t clues along the way. For starters, Fred/Alan recalls producing 100 commercials a year before calling itself an agency. The principals, acting as strategic/creative consultants at the time, pitched all of their ideas without storyboards. “We’d simply go in and act it out, just like in those stupid old movies,” Seibert says. But the day Fred/Alan changed its designation to agency, the same people at the same clients started demanding storyboards. “You’re an agency now,” they’d say.

Other clients, while pleased with Fred/Alan the consultancy, started looking for excuses to fire Fred/Alan the agency. It was, quite simply, their way with agencies. One went so far as to jettison the relationship immediately, citing his policy never to work with agencies. “For him,” Seibert says, “an agency meant layers of bureaucratic nonsense.”

As it leaves the business, still believing the function of advertising is as vital as ever (even if the agencies aren’t), Fred/Alan relishes shaking things up as much as it did. Weiden & Kennedy, the hottest shop going, admits openly to stealing from MTV, which in essence is stealing from Fred/Alan. The sad thing is that the optimism that continues to propel W&K is depleted at the source of influence. Of Fred/Alan’s 30 disbanding workers, only one is seeking his next job in a traditional agency.

Goodbye Fred/Alan.

The early 1990s made us face the limits of the business we’d built.

Starting as a production company in 1983, we made a TV series for the Playboy Channel and promos for TV networks and record companies. Soon we’d evolved into the only company branded cable channels; we’d introduced the idea to our former employers and clients at MTV and Nickelodeon. In 1988, Nickelodeon asked us to become their advertising agency. MTV and other clients soon followed.

At first we loved it. After a couple of years, we came to loath it.

The creative and strategy work was fabulous, when we could actually do it. Our lives had become the grind of supporting the overhead of over 40 people, constantly defending ourselves to clients who’s businesses we’d built from scratch, and constantly looking for new business.

Worst of all, Alan and I had stopped actually working together, the reason we started the agency in the first place. We were managing teams and arguing, not about the work (which would have been fine), but about the guarding of some real or imagined disputes between the members of our respective charges.

And the business of advertising agencies was getting stupid. Clients were coming to the conclusion that they could do much of the marketing strategy themselves, sometimes even the creative. There was constant downward pressure on fees, with the standard —15% of the media spend— coming down more than a point a year. The agency reaction was basically to combine in gigantic roll ups to protect themselves. Fred/Alan itself had buyout offers coming more rapidly every year.

I called Alan one night in February 1992 and before our conversation was over we’d agreed to announce the closing of Fred/Alan the next morning. We had a party for all our current and former colleagues at our offices on lower Broadway, a lot of laughs and tears were had, and locked the doors for good in May.

—Fred