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Space Race With Space150

After a year of rapid-fire expansion, Space150 keeps reaching for the digital leading edge in advertising.

Space Race With Space150
Space150 “is modern-day advertising,” says CEO Billy Jurewicz. “It’s what the ad agencies were in the ‘60s.”

Yes and no. The Minneapolis agency that Jurewicz founded 11 years ago is structured something like a traditional ad agency. There’s a creative department, media planning, account management. But instead of a 30-second TV spot or a glossy magazine ad, the end product is more likely to be a mobile app, a Facebook page, a YouTube video, or a video game—anything delivered in bytes and pixels.

The firm created buzz last year with a project it described as “getting picked up by a model.” The work is still drawing crowds in Manhattan today. When New Yorkers and tourists look skyward in Times Square, they see a larger-than-life model—and themselves—on a huge digital billboard for “fast-fashion” retailer Forever 21. The model toys with her tiny spectators, plucking one from the image of the crowd and flicking him away, kissing another to turn him into a frog, and tucking a third into her shopping bag. The billboard succeeds as spectacle even in a place where flashing 50-foot-screens are the norm.

Every advertising agency does digital work now. The difference is that most added digital platforms to traditional media and traditional methodology. “That’s baggage we didn’t have,” Jurewicz says. Space150 was purely digital from the start, and at the start, that just meant building Web sites. Now, it’s “two-way interactivity on an outdoor board, and a boord that can see you.” If the technology has changed that dramatically, so has the opportunity for a digital agency.

As for the ‘60s, Jurewicz likes to play up his firm’s “R-rated” office culture. Pulsing music, open liquor cabinets, and the blue glow of computer screens make it feel like a cross between Mad Men and Star Trek. He also recalls the counterculture nature of launching a Web-based business during the dot-com bust. “We were pooh-poohed in the beginning for being too young, we had no silver hairs in the room and we were a bunch of kids,” Jurewicz says. “We’ve grown up now.” Space150 clients include American Express, General Mills, UnitedHealth Group’s OptumHealth unit, and Dairy Queen.

But what Jurewicz is really getting at is the idea that this, like the ‘60s, is a new media age: Consumers were tuning into televisions then, mobile devices now. He sees Space150 as an early mover into—and still out front in—a new era.

Michael Keller, Dairy Queen’s chief brand officer, says Space150 is “cool—they’re probably a lot cooler than a lot of us on this side—but they’re professionals.” In part through viral videos and online games, Space150 has helped Dairy Queen build a Blizzard fan club on Facebook with more than 3 million members. 

“We are overperforming in social media,” Keller says, “and Space gets a lot of that credit because they’re helping us hang out closer to the edge.”

Talent and the ever-expanding toolbox

In 2010, Space150 says it had gross revenues of $24 million, up from $14 million in 2009. It’s added about 50 people to its staff since the fourth quarter of 2010 and is now flirting with that magic number of 150. (The name Space150 comes from an amalgamation of Jurewicz’s interest in Asian numerology; his belief that technology, like space, is never ending; and his firm’s first suite number in the building where it’s still located, the Colonial Warehouse in the North Loop.) The firm is expanding a once-tiny California satellite office in Venice now, and recently grew in New York City with new digs in Brooklyn’s Digital Dumbo neighborhood, considered to be the Madison Avenue of digital marketing.

“As we think about growth on the national scene, having a presence out here [in New York] is pretty paramount,” says President Marcus Fischer, who joined Space150 in 2008 from Minneapolis agency Carmichael Lynch. Both the New York and California offices put Space150 closer to clients, including the Los Angeles headquarters of Forever 21. The L.A. office also gives the agency access to a new market of video and production talent to run a new business unit, Space150 Productions, that it launched just a few months ago. 

“By us being able to have more control of the actual creation of [video content], we can also begin to create it so that we have the right format to put it either on the Web, signage, mobile, or whatever it might be,” Fischer says. 

Other than tapping L.A.’s entertainment industry, Space150 typically finds the talent it needs in the Twin Cities. New York has primarily client-facing service staff, Fischer says, and “everything is still based in Minneapolis. We’re not trying to recreate Minneapolis in our new offices.”

Digital talent is increasingly specialized as technology platforms multiply. “Back in the day, [ad agencies] could just hire a Web developer and the technology wasn’t as complicated,” says Carrie Nelson, vice president of strategic alliances at Fusion Room, a two-year-old Edina firm that provides technology development for ad agencies that choose to outsource that work. “To keep somebody on staff who has expertise in all sorts of techologies is just not realistic anymore.” 

Space150 has made itself a standout by specializing in amassing specialists, both across technologies and across disciplines. Nelson, who worked at Space150 for a time two years ago, says, “Space, they just excel at the digital space in that they know how to design well, they know how to develop well, they know how to come up with really amazing concepts. I think it’s a benefit that they’ve been digital this whole time,” she adds, “because a lot of firms are trying to kind of break into that now.”

The best talent will always migrate toward traditional, full-service advertising agencies, says one local exec who runs such a firm, because the most creative people want to have a full spectrum of media available to them, not just the digital tools from the toolbox. 

“I guess I’d look at the digital space as the ever-expanding toolbox,” Fischer says. There is no offline world anymore, he says, and digital messaging permeates everything, certainly everything in the entire consumer journey from brand discovery to purchase, sign-up, or whatever the desired outcome might be. Digital work is also continually morphing. Fischer cites a projection that more people will access the Web on mobile devices than on desktop or laptop computers by 2015; the experience of the Internet—and of designing content for it—is changing fundamentally.

“My take is we design things for human behavior,” not for specific media channels, Fischer says, “so as a result, that’s a bit broader in nature.”

Space150’s recent growth came not from Web development, but mostly from what the agency calls “product development”: building games, mobile apps, and things like the Forever 21 billboard. The common denominator is an interactive platform that can put out more than a single message. 

In traditional advertising, as Jurewicz describes it, a campaign lives for three to six months, then goes away. But with a platform like the Facebook page that Space150 built for Dairy Queen, “now you have a network,” he says, “just like you would on a traditional broadcast medium . . . except the difference is it’s your own versus paid media, where you have to pay someone else who owns all those eyeballs.”

He adds, “Every time we do a campaign of some kind, like a 25th anniversary promotion for the Blizzard, we all of a sudden capture about 700,000 or 800,000 more people to our own”—meaning Dairy Queen’s—“personal network.” In total, the anniversary campaign took Dairy Queen’s fan base from 300,000 to 3.2 million.

Soon after Jurewicz left Minneapolis-based Fallon to start his own ad agency, Fallon released its high-profile film shorts for BMW, directed by Ang Lee, John Frankenheimer, and other Hollywood names. Jurewicz recalls it as a “revolutionary” project at the time, “and it got put on the Internet, but it didn’t necessarily have the integration or two-way communication that digital has today . . . . I think that’s where digital destroys the barriers of a shotgun approach like a television ad,” he adds. “You’re navigating, you’re choosing.”

Interactivity—and even the word “digital”—was missing from the marketing lexicon when Jurewicz started his business, so he called Space150 a “Web-centric” agency. It wasn’t the first of its kind in the Twin Cities, but others overbuilt and didn’t survive the dot-com crash, he says. Space150 started “picking up the scraps,” building flashy Web sites for clients including Famous Dave’s, the Fine Line Music Cafe, and Fair Isaac Corporation, developer of the FICO credit score. 

In the years since, technology has picked up so much speed that traditional ad agencies “almost have to destroy the entire place and rebuild it from scratch” to catch up, Jurewicz says. But he acknowledges that technology could leave him behind, too. He was “shocked” to find that he now has employees who don’t know what a baud modem is or what a fax signal sounds like. “Even Twittering is awkward for me,” he admits. 

Space150 relies on a “skunkworks” R&D operation called the SpaceLab to stay ahead of change. Employees float in and out of the Lab. Getting chosen is “almost an employee incentive,” Jurewicz says, a sign that the agency is investing in those people. They have the freedom to introduce and tinker with ideas that aren’t yet associated with any client project. 

Space150 Productions used a technology out of the SpaceLab lately in a music video for L.A. gangster rappers King Fantastic. It lets users upload themselves into the final, gory scene, and it grew out of Lab workers having fun trying to insert their coworkers into movie clips. Some of the Forever 21 billboard technology also began in the Lab. And a few years ago, Jurewicz says, so did a development protocol called Faust that makes the content in Flash animations readable by search engines and non-Flash browsers. 

More Strategic Now

pace150’s latest work for Forever 21 rivals the Times Square billboard as an attention getter. In April this year in Vienna, the agency kicked off an eight-city, global fashion-show tour for its retailer client. The runway models were all holograms. (See the YouTube video by searching for “Forever 21 Holographic Fashion Show”; note that Burberry, Diesel, and Target have used similar effects.) 

The high-tech trick relied on a 19th-century illusionist’s technique called Pepper’s Ghost, involving mirrors, light, and shadow. It underscores the fact that Space150 has been scaling up at a time when digital advertising and marketing disciplines are still being formed. A creative process that used to require a copywriter and a graphic designer now involves various “creative technologists” who conceptualize the technical underpinnings of a project. Jurewicz says he recruits from software companies, video game developers, and other technology businesses.

The new work for Forever 21 also underscores the agency’s intentions going forward. While Space150 has picked up new clients recently, including OptumHealth, it intends to focus more on deepening its relationships with existing clients.

Fischer calls this a more strategic approach to growth. He believes digital marketing and advertising will increasingly be about product and platform development, and long-term strategies for clients, rather than individual campaigns or one-off projects.

“We’re starting to turn down work that’s more, ‘Hey, just build us a Web site,” he says. “I guess that’s not as interesting for us as it is if someone comes in and says, ‘Help us solve this business problem.

Pacing the firm for more moderate growth—the goal is about 10 percent a year for the next few years, Fischer says—doesn’t mean that Space150 will moderate its creative ambitions. Staying out front in the digital realm won’t allow it. 

Since 2007, Space150 has been working on concepts and technology that will allow it to project advertising onto the surface of the moon, the agency maintains. Jurewicz even claims that he and his colleagues have pulled off a successful test run but “just didn’t tell anyone about it.” He can’t say much about the project at present, but it’s “mostly legal” issues that prevent an official product launch.

It’s the ’60s all over again; hopes are pinned on a moon shot. Jurewicz says, “Our ultimate swan song is projecting images onto the moon.”

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