Alex Chesbro's Blog

The Enfati-fuckup. | April 14, 2009

Dude. You didn’t.  You bought a Dell.  Oh, no.

I’m sure you’ve heard.  Enfatico is no more.  Or maybe you haven’t heard of them.  Because they didn’t produce a single piece of work!  Ok, that may be a lie, because they trotted out some swill in India, but that shit ain’t gonna fly in the good ole U S of A.  No, sir.  

You don’t build an advertising agency in order just to serve one clients needs.  What a terrible way to do business.  Sure, it sounds good on paper: “Hey, how about we make this company, just to do ads for Dell, then they don’t need to worry about any other agencies mucking through the shit?”  “Oh hey, that sounds like a great idea..”  That must have been what went down.

Instead, after only 16 months, and almost 1,000 people later, Young and Rubicam is swallowing the toxic debt that is Enfatico.  For those of you who aren’t adver-biz savvy, let me explain this in terms of the Economic Crisis of Doom (2009 redux).  WPP is the United States government- it watches over all the banks and lenders, like Ogilvy, Y+R, Grey, etc.  One of the investment banks, Enfatico, took on bad debt.  They thought they could cover the margins, but after multiple successive fiscal quarters of posting no profits, their assets were deemed illiquid.  Being the noble steed WPP is, they decided that Enfatico was “too big to fail,” and sucked up the illiquid assets to spread across their debt sheet.  By having Y+R take in Enfatico, WPP may be able to possible lower its deb ratio and climb back into the black.

Now, all this news about Enfatico finally hitting the fan is old news.  Well, it’s old news if you read AdScam.  George Parker called this a few months ago, and last month, I concluded that Y+R would take them in, base solely on the fact that Y+R and Enfatico are in the same office in Miami Beach.  Go me.  Anyway, this should be a lesson to anyone looking to start their own agency, or for any holdings company that thinks they can get ahead by creating crap.  

The average gestation for an ad campaign is around 3 months.  It was 16 months, before the Adamo shit ever came out from Enfatico.  And even then, they mucked it up by not wanting to pay for the website rights.  Anyway, much more of the full story at AdScam.  And it’s also a great place to stay ahead of the curve for ad news.  AdAge is literally a day behind…

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