Pushkin, Tolstoy and Checkhov in tracksuits and with their PE teachers' whistles and serious faces propose that teenagers should start reading. These posters were all over the social networks at the end of May and will soon appear on the streets of Moscow. Denis Lapshinov and Victor Sokolov from SLAVA agency created the campaign. In fact their first project, Paratroopers read poetry in Gorky Park, also did not go unnoticed: The television channel "Rain" put it on air of their own initiative. Just nine months ago Lapshinov and Sokolov left the largest advertising agency in Russia, BBDO. They told Hopes and Fears about what it's like to stop working at a large corporation and create your own business.
How did the campaign promoting reading appear? Whose initiative was it?
Denis: Of course it was not our initiative. They (Rospechat and the Union of Russian booksellers) came to us with their problem. Now teenagers really do not read at all. The idea came about to make the image of writers more modern and try to peak the interest of a young audience in this way. They came to us because they had seen our campaign for Bookmarket "Paratroopers read Pasternak".
Did SLAVA agency start with the launch of this campaign?
Denis: SLAVA has existed legally from 1st September last year. Before that we did a few things but on 1st September Victor and I officially resigned from BBDO and went to Channel "Rain" to present our first campaign with the paratroopers. We started making it in May/June, still working at the agency and it launched on the last working day at BBDO.
ABOUT THE TEAM
How was SLAVA's team formed?
Denis: Our third partner John Mark Fitzpatrick quit BBDO in April 2010 and from that point him and Victor did some projects together. You couldn't say that Victor and I were super friends, but our friendship started as a result of collaboration. I have been wanting to start my own business for a long time and always kept my eyes open for such an opportunity. Once I found it I just approach Victor and said that I would like to join the agency and develop it together.
Did you not have a conflict of interests with your employer as a result of you working on your own projects.
Denis: We had time for both. It all depends on specific people. We worked with people for whom the most important thing was the result. If you do everything that has been asked of you and you do all your projects well, then you can do whatever you want with your free time.
Victor had his own agency, as far as I know, which became the base for building SLAVA, what did it do?
Victor: It existed in a state of half-hibernation. We did a few things but not actively. Then Denis came along , well he didn't come along he was sitting opposite me the whole time, and we agreed to do something. With Denis came another partner - Alexandrina Markvo, who takes care of new business. We regrouped and decided that it would be interesting and that we would achieve something.
ABOUT THE MOTIVATION
Why did you decide to leave BBDO, what was your motivation?
Denis: It has become boring in BBDO. We began to feel many obstacles to doing great work.
What were the disincentives? The bosses?
Victor: I didn't feel like I didn't want someone telling me what to do, I wanted my own business. Business has always been a resource for me that allows you to do work that you can be proud of and show your kids. In big agencies (and not only big agencies but in general it's an issue of the whole advertising industry in Russia) there is very little competition. We now sit here and dream up ideas but there is no feeling that there are even three agencies in Moscow or even in Russia who are also creating something incredible. The feeling that someone is breathing down your neck just doesn't exist.
Denis: Also there is just no demand for great ideas, so there is no competition. Despite the fact that for the last year all the clients that we talk to - and they are fairly large clients - tell us: here is the market leader with a large budget and we need to take over their position in a cunning and clever way. If there were only one or two of these companies around before, now it is turning into a trend and even at the Cannes Lions festival it is noticeable. Whereas before only 300 clients would go, now over 3000 attend the festival. And that means that a demand for creativity is emerging. If we have a look at how our campaign spread over the internet (our friends even complain: we can't go on our social network news feed because it's all lit up with your posters), shows that the demand has appeared. Three years ago you couldn't imagine a campaign spreading like that.
But I still don't really understand, why did you need to leave stable BBDO, where you were doing the same thing…
Denis: Because, you - women need to give birth to feel fulfilled. But with us it was a different story. Men are less whole since they have to persistently prove themselves and do something meaningful.
Victor: It's very simple in my case. You work consistently in a large company, you have some sort of career growth and all is well. But if you look back 10 years and forward 10 years you can just about evaluate where you will be. And you know that at 46 years of age you do not want to be in the position of creative director of the Russian BBDO and that is probably where I would end up. This is neither interesting financially nor in terms of personal growth nor in any terms. Even working in the best advertising agency, which I do consider BBDO you are doing 90% rubbish and 10% good work. And here we can do everything the other way around.
At the same time I do not blame BBDO. It is just a case of industry standards and an environment with little competition. A brand can put any rubbish on TV to sell itself and a creative does not have to particularly try to creative something like that. And there are a huge about of such creatives in a Russian agency in their own stuffy world and are just getting dumber. And then you have to take your balls in your hands and put yourself in a position where you cease to get dumber. Now we have to compete and we are trying to compete not with our own industry but with the western advertising industry. We want to hold ourselves up against London agencies, not Russian ones.
ABOUT THE FEARS
Well, but there are more down to earth things. For certain you received excellent golden parachutes, but I can't believe you didn't think that they would finish sooner or later, and your business would finish with failure?
Victor: There was such a fear. I actually bought a car immediately after I’d left BBDO.
Denis: And I had a child. I don't know, in general I had no fear. It seems to me that things, which can be given to you, are more important, than a feeling of stability, which you lose when you leave. Such a situation is a much better motivator. Money can make you relax somehow because you don't need to sit and work hard.
Victor: I had a cool feeling, when I was sitting with my former colleagues from BBDO and suddenly one of them said: "Oh, our salary will be available on our bankcards soon". And then I’ve understood that this is the thing, which didn’t disturb me anymore, in general. I am not waiting for my salary twice a month on certain days, and I think I like this feeling.
You were most likely offered to stay and were enticed with bonuses? Well and, perhaps, it was inconvenient for you to leave people who relied on you?
Victor: Well, damn, I’ve been working there for six years. And to be honest, I had the conversation with the creative director of BBDO Igor Lutz, he, of course, offered me certain causes to remain, but then he told me: “I am, certainly on your side morally, because the person has to leave a job where he is stagnating and start doing something special". But the decision had been made by all of us, it was impossible to say: "Oh, I was offered a bonus, I'm staying".
Denis: Besides we have told everybody that we were going to leave in September in a few months before. We left and stayed in good relations, then we had crossed in some situations on business a few times, we were told that we behaved not absolutely ethically, though it is not so.
ABOUT THE RESHAPING
Before your agency turned into SLAVA, it was engaged in advertising for small and medium sized businesses. Why have you reoriented on big customers?
Victor: The first reason is that we have exactly such experience: we are able to work with big business, with big tasks and big budgets. Also we’ve understood that the agency, which works with small and medium business, won't be a success.
Victor: Because it doesn’t earn money.
But surely the process of approving concepts is simpler with the small companies? With them is it not simpler to make something cool?
Denis: It is hard with everyone, and there are no statistics. It is easier to make a cool idea with a small business: you have access to the top management, you can meet them literally in the bar and say: "Look, this will work". But then other problem begins: how to make something with a limited budget, what in reality needs a budget 10-20 times larger? And in this case it is easier to make something cool with bigger customers though it is more difficult to sell to them: You have to pass several steps of decision-making. At first the manager, then the marketing director, then the shareholder. But everything is possible. The example is our last campaign, it has a standard budget.
Denis: We can’t disclose it. It is completely commercial. Clearly, this is not the budget of BBDO. When people get the information about the cost of the commercial, they become surprised, because in a large agency, it would cost three or four times more money. But still this is not the budget of a small or medium sized business.
Nevertheless, how did the belief appear, that large customers will leave large agencies and come up to you, a small agency?
Victor: To be honest, we did not understand immediately that we needed to focus on large customers. We just had this feeling: that we are so small, so we need to work with those who are as small as we are. But all at once we realised that in terms of both positioning and strategy, this was the wrong way to go. In fact, we can work with large customers, and they can work with us, and that's just from a financial point of view, and in terms of ambition it is what we need.
How much time it take?
Denis: A few months.
In this period you probably did not have much turnover?
Denis: It's hard to say, if we have little turnover or not, because when we were entering the market, we understood that any planning was ridiculous and a waste of time. To be honest we did not make any business plan, when we decided to make our own agency. We do not even have anyone to compare with. We decided to spend all this time on real action, which would allow us to feel our way through. Now we have already some understanding of what levels we need to go.
It means that nine months have passed and you’ve realized how much would you will earn next year?
Victor: Probably not how much we will earn, but how much we need to earn and how much is possible to earn.
Did you invest some funds, when you started?
Victor: There was no investment except our time and our names. This is a business that can be started from scratch.
ABOUT THE CLIENTS
How many tenders have you already managed to win?
Denis: We have been actively participating in tenders over the last two or three months, some parts we have just presented, will be presentations, so there are no statistics yet. But in April and May, we have done more pitch presentations than in the previous seven months. This is also connected with the seasonality of the market: January-February - the traditional lull. Plus four months were spent on bureaucracy: when you work with large clients, you have to go through their audits, to issue a bunch of documents, to make a presentation for their marketing department, also for somebody else and somebody else. So we have been working over the last three months, just to gain a foothold in their pool of suppliers.
Is there any need to lower prices?
Victor: No, we don't lower our prices. Lowering prices is a result of complexes: oh, we are so small; we should work for small money. It is absolutely wrong. We are a serious and expensive agency. Of course, our price tag is lower, than BBDO, but we work in one price segment. And, by the way, that's another problem of working with small and medium size businesses. It is impossible to explain: why you have to pay a large sum of money for a picture and half a page of text; they just don't get it. You need four months of work to make a project, and big customers understand it well.
But after all, have you any contracts already signed? Is it possible to name something?
Denis: There are signed contracts, but we can't disclose them yet. We are developing two big campaigns, and they will start in three-four months.
Is there already some profit?
Denis: There is some profit and there are big receivables.
What turn do you plan to make next year?
Victor: It is difficult with turnover, but we can plan our workload for the year ahead, but workload in its current format. We made 6 campaigns in 9 months. We hardly will be able to make more than 12 campaigns as creatives and as an agency in a year. On the other hand, if we suddenly understood, that we could win serious contracts and we would have to do 15 campaigns, then we would start expanding. So it is difficult to plan, let's see, how many tenders we will win.
ABOUT THE PROSPECTS
Aren't you afraid of a crisis?
Denis: We are waiting for a crisis very much; there is nothing better for a new company. The clients will start to relate more wisely to budgets and estimate better how to spend money. And we have big advantages here.
If it happens like this, and you set an example for your colleagues from network agencies and they will leave their jobs and will start creating their own agencies, what will you say?
Denis: We hope very much that this will happen. You should leave! Resign and run. Only then there will be some competitive environment. Network agencies where 500 people work, are already so slow; it is awfully difficult to make some bright breakthrough work for them; because even, if 20% of your team are motivated, the other 80% aren't motivated at all. One of our friends - a Brazilian, who works in Russia, told us the story how he was being enticed by a network agency with words: "Come here, friend, take carte blanche" — and the first thing he did was to make a list of firings, because it was impossible to work with part of the people there. He got the answer: "Sorry, but they work here for eight years, we cannot fire them". But everything was happening in the same way in the West, and those who changed a situation and created competition, have already become just as slow; and one day we will become the same.
Are you going to expand or you don't want to be faced with the problem of growth?
Denis: We want to grow according to the model of English agency Fallon. It was initially made by the people who left network agencies too, then it became slow and immobile, then again people left it and now they are creating the agency 101 London. We want to apply their model: there was only senior staff, there were neither creative producers, nor trainees. But, unfortunately, we especially don’t have any strong senior staff in Russia, though there are new people with good ideas, who’s brains haven’t been punched yet with all these network stories. But there are less people who can execute the ideas. Russia is pulled in this sense with the help of expats.