"We set out on a hunt to find exactly what no one else wanted to find: Clients that desperately needed our help, but couldn’t pay us our full quote,”
New York, NY (PRWEB) March 16, 2010
At a time of economic turmoil, Venture Capitalists aren’t the only ones investing in good ideas. Ruckus Marketing turns to creative contracting to attract, grow clients.
The marketing industry has been slammed with the recent economic crisis. With large companies significantly cutting back budgets, and small businesses unable to get financing for growth, smaller agencies were left clinging to a vertical wall. “It was an incredibly difficult time for everyone…” says Josh Wood, CEO of Ruckus Marketing, LLC, a New York City based Digital Advertising and Marketing Agency. “You could have guaranteed returns, and still very few would invest the money.”
With much of the market at a virtual standstill, agencies struggled to find new accounts and were commonly told that budget had been cut or currently frozen. Having few serious prospects and realizing that it was not for lack of effort or ability, some agencies started to get a little more “creative.”
“What we started to notice was that the market had actually created a tremendous opportunity for us. We set out on a hunt to find exactly what no one else wanted to find: Clients that desperately needed our help, but couldn’t pay us our full quote,” says Alex Friedman, President at Ruckus. “The theory was that if we could find businesses with solid products, generally good distribution, and a proven business model, we could invest our services and help them grow to the point where we could start to see a return. I know it sounds a little crazy, but in a way we were trying to invent our own client base.” And did it pay off? Ruckus Marketing has grown substantially in just the last two years. It currently owns interest in a variety of businesses including a Brewery, a Social Network, and an Events Management Agency.
Ruckus employs a strategy not dissimilar from that of a Venture Capitalist. The company provides or subsidizes services in exchange for equity, percentage of sales, distribution rights, and back-loaded service fees based on success. “We are looking for the best opportunities and make calculated bets. At the end of the day a product has to be good, but the marketing has to be great for it to be successful. We invest in what we know we are really good at. If we do our job well, it is a win-win for everyone, and that’s why companies are so eager to involve us,” says Wood.
Time will tell if the model is sustainable and how quickly the company will see returns. Early results show tremendous potential. Ruckus confirmed that they are starting to see a rebound in the market. With unemployment at nearly 10%, it is inevitable that we will see new businesses emerge to fit the profile. The real question now is; Could marketing companies be leveraged by VC’s as a cheaper more effective way into potential portfolio companies?