For Sale: One Ad, Slightly Used

Thought Equity are back in the news. We wrote about them in 2003, here they are again, featured in ADWEEK.

"For three months last year, viewers of local cable in Atlanta saw an ad in which a man pushes his face flat in a mirror to simulate the effect of acceleration. He's dreaming of how it will feel to race in his BMW once it's been customized by local shop Harrison Motorsports. Earlier this month, that same ad was reborn in Las Vegas-area movie theaters, this time with the reference to the car shop removed and a stock photo of a Hummer tacked on at the end, along with Budget Rent a Car's tagline.

Brian Singleton, marketing director for Budget's Las Vegas franchise, was happy to have the hand-me-down content. It cost him $1,200 to license, a fraction of what Atlanta agency Sawyer Riley Compton spent to produce the spot. "I never would have been able to afford this kind of quality otherwise," says Singleton.

Recycling ad content may seem like a no-brainer. Modest-size regional businesses would surely love the chance to pick up high-quality, low-cost television commercials. At the same time, ad agencies would be happy to earn some extra money for content that has run only in one region or that was produced on spec and never sold.

Connecting this market with this resource is the idea behind 1-year-old Thought Equity, a Denver company with an archive of 1,200 commercial clips that regional media outlets can sell to local advertisers. "There's got to be billions of dollars of unused creative out there," says CEO Kevin Schaff. "It doesn't make any sense for all that value to be gathering dust in a filing cabinet."

But applying a thrift-store model to creativity is not all that simple. Content has to be generic enough to appeal to a second-time-around client and can easily start to look dated after a while in the vault. And if a client commissioned the original ad, that marketer has to be willing to see it licensed elsewhere. When the idea was tried before with a company called Admine, the experiment lasted just two years.

Thought Equity, in fact, has its roots in Admine, which shut down in January 2001 despite boasting a board of directors that included Cliff Freeman's Arthur Bijur and The Martin Agency's John Adams. In that case, collecting the content proved too costly, says Mark Ein, CEO of Venturehouse Group, a venture-capital firm that invested in both companies. "Admine did a good job of gathering content and creating customer interest, but it was spending too much money too fast," he explains. "Thought Equity is taking a more conservative approach."

About a third of the company's database originally belonged to Admine, and Thought Equity uses Admine's infrastructure to deliver some of its content. Thought Equity acts as a middleman, sending 40 percent of its licensing fees to the owner of the original content.

Another problem Admine encountered was the reluctance of potential clients to log on to its site to sift through content. In contrast, Thought Equity sells its content through partnerships with six media companies that comprise 122 local outlets. The partners, which include cable giant Comcast and theater chain Regal Cinemedia, can use the recycled commercials to help motivate clients to buy advertising, or they can charge advertisers an add-on fee for use of the content. Thought Equity provides training on using the database, checks to make sure that no ads are sold twice into the same designated market area and handles royalty payments.

Sawyer Riley Compton, a $50 million shop, so far has seen a few of its commercials recycled through Thought Equity. The spot for Harrison Motorsports was produced "to spotlight the talents of the agency," explains creative director Bart Cleveland, and was provided to the client at "a substantial discount." (Client general manager David Harrison says he got the spot for free.) Cleveland says the possibility of reselling the commercial through Thought Equity helped prompt the agency to make the ad. "We definitely had it in the back of our mind, and it lowered our risk," he says."

Schaff says he has received content from 386 providers, ranging "from $100,000-a-year freelancers up to $50 billion-a-year multinational ad agencies," but he would not disclose the names of any large agencies participating, citing confidentiality concerns. Adams, chairman and CEO of The Martin Agency, says his shop submitted commercials to Admine, content that has since landed in Thought Equity's database but has not sold. "We had some stuff in there, but we never saw any revenue from it," he says.

"Admine purchased content from a wide range of agencies," adds former Admine executive Bill Replogle. Thought Equity shares distribution rights for Admine content with Vienna, Va.-based ProAd Group (an outfit that also does traditional advertising and marketing), whose CEO, Dave Dolton, claims much of that material is outdated and usable only as period-piece stock footage.

Both Dolton and Schaff, however, claim to be wildly optimistic about the potential for reusable ads. "It's too early to tell, but the market has tremendous legs," says Dolton, who expects to have 3,500 pieces of content within a year. Says Schaff: "We are creating an entire industry shift in advertising that empowers reuse versus re-creation."