The American dream team?

James Hamilton investigates why Miami's Crispin Porter & Bogusky elicits feelings of admiration and jealousy in equal measure across the global ad industry.

For a place that's supposed to be the epicentre of cutting-edge advertising, Coconut Grove is a deeply unfashionable address. It's six miles from Miami Beach and light years from Madison Avenue, Soho or Shoreditch.

Crispin Porter & Bogusky's HQ is hidden in a bland, pink stucco shopping mall in the middle of the place the area's yuppy residents call "the Grove". Its neighbours are Gap, Old Navy and a branch of the Cheesecake Factory restaurant chain. But all traces of faceless American suburbia-by-the-sea disappear as I step out of the lift and into the first-floor offices. It's like walking into the Tardis. It's a vast, industrial space carved out of the former multiplex cinema the mall once housed. Suddenly, Miami looks cool again, and the decision by clients, that include Volkswagen, Burger King and Coca-Cola, to park more than $1 billion of business there, begins to make sense.

There's a cloud of mystery that surrounds CP&B, one that thickens when viewed from this side of the Atlantic. Is it smoke and mirrors, or does the agency have an alchemistic touch with advertising? I call a few of its peers before heading out to Florida; they variously describe the agency as "easily as good as everyone says it is", "constantly able to find the next big thing" and "a creative sweatshop where it doesn't pay very well and works your brains out until you leave". One UK agency chief asks me to ask the partners if it's true that the agency doesn't take part in pitches; "doesn't do" procurement and has a simple ratecard for clients? This seems as good a place as any to start.

Jeff Hicks, the agency's chief executive and president, gives a broad smile and launches into an explanation that he appears to have given to many a bemused potential client.

"We've always believed advertising is a 'product' as opposed to a 'service business'," he explains between bites of a bagel. "We've abandoned all vestiges of service-based compensation like tracking hours, billing for time and carefully defined deliverables.

"Sometimes this is tough for people in purchasing to understand. In calculating compensation, we don't really use a ratecard. I wish it were that easy."

Instead, the agency aims to build "fair partnerships" with its clients; deals that reflect the scale of its involvement in their businesses and, hopefully, allows the agency to share in any value it creates.

CP&B is well ahead of the pack on this particular innovation. Chuck Porter, the agency chairman, tells a story from the mid-90s, when CP&B was just a local shop for local people, and was pitching for the Mercedes dealership Southern US account.

"I looked at their business and said: 'We'll do all the work for $33 a car that you sell'. They loved it; we knew roughly how well we'd do; if they did better, we'd do better," Porter explains.

The agency has been on some sort of performance-based compensation ever since. Last year, it embarked on its boldest deal yet, taking an equity stake in the clothing company Haggar as part of its compensation on the account.

"We do a lot of unusual, unconventional work that probably a lot of marketers haven't seen before," Porter explains. "Because of that, it can make some of them nervous, so anything we can do that puts us on the same page as our clients is a good thing. The Haggar deal is just a natural extension."

What about the pitching question? Have the majority of CP&B's billings really been handed to it on a plate?

"We do a lot of explaining the model, and describing what we do, but we don't pitch for business," Hicks says. Pitching, he thinks, is a broken model, and the work created in the process almost never ends up getting used. Plus, clients are now more aware of the way that CP&B works, and tend to self-select the agency.

Hicks joined from Leo Burnett in 1997, and is the most fervent CP&B evangelist out of all the partners. He barely pauses for breath in the agency spiel and, the funny thing is, none of it feels like a sell in the slightest.

The agency hasn't pitched for business in the past five years, he claims. But are there any accounts out there that might tempt the partners to break that self-imposed ban? What if, say, Apple signalled an intention to come out of TBWA\Chiat\Day?

"We would consider it," Jeff Steinhour, a partner and the agency's director of content, concedes. Although he does add the caveat that: "If one of the four prinicpals doesn't want to wreck his life going after something, we won't take it on. We've had better luck with a different approach."

That approach involves prospecting. "We still do an enormous amount of new-business work, trying to find clients in categories where we think we have expertise, or might be of help," Hicks says. "But the kinds of engagements we really like aren't the ones where they come in and say 'we want to talk to ten agencies and we're looking for this year's new tagline and campaign'. We don't really want to do that; we want to be collaboratively part of the rebirth of a company and do something more than just a few ads." Clients, he says, are aware of the alternative ad culture at CP&B, and tend to pre-select the agency, which makes the hunt for new business easier.

CP&B's rise has been slow. The agency describes its ascendancy as "an overnight success 42 years in the making". Certainly, the agency, which took four Grands Prix at Cannes in four categories and now has billings topping the $1 billion mark, had humble origins as a very local Miami agency.

Crispin Advertising, as it was for 22 years before Chuck Porter joined as the creative director and appended his name above the door, never looked like threatening the awards shows or rivalling the new-business departments on Madison Avenue. Alex Bogusky joined in 1989, by which time Sam Crispin had retired, and was made a partner in 1997. Billings stood at a modest $100 million at the time.

The partners generally agree the tipping point was the $70 million "truth" anti-tobacco campaign in 1998. "Truth" sought to stem an alarming rise in smoking among teens in Florida, and meant investing in major research with its target audience. "We were seeing things starting to happen with the internet, and with clothing and apparel. If you trace the history of this agency, a lot of the innovation comes from that," Hicks says.

The campaign acknowledged that telling adolescents that cigarettes were bad for them was counterproductive. Instead, the agency changed tack and created a series of ads that played on the fact that, while teenagers like to be seen to be living dangerously, they hate being manipulated.

Ads shot just like indie documentaries zeroed in on some of the shady tactics tobacco companies use to recruit smokers, and featured transcripts from tobacco executive meetings. They were backed with fliers and stickers, and created the impression of an angsty, underground campaign that spoke to its target audience in its own language. From 1998 to 2001, smoking among high school students in Florida fell by 38 per cent, and "truth" eventually spread as a national campaign.

CP&B's detractors - and it has more than a few - argue the agency has replicated this campaign in some form or another ever since. They say it's a one-trick pony which only knows how to talk to a narrow, receptive demographic: young men in an actual, or prolonged, state of adolescence. Witness its work for Mini; "man rules" for Miller; the Harry Enfield-fronted "Angus Diet" TV campaign for Burger King. Where, they ask, are the ads that talk to women? Where are the long, slow-building strategic campaigns?

Iconoclastic advertising is CP&B's stock-in-trade. Part of the reason the agency comes in for so much stick from its peers is that the quality and sort of relationship it enjoys with its clients allows it to get away with ideas such as collectible toy "fasts" and free electric guitars to whip up interest in the VW Golf GTi; and an unsettling plastic king fronting Burger King. Its recent ruse for the fast-food giant was $3.99 Xbox titles in which gamers literally play Burger King ads. That the venture shifted 3.2 million games, and was a cash-positive campaign for the client, is all the more galling.

"If there's a national sport in slagging it off, it's inspired by jealousy," one rival US agency chief says.

"People pick apart everything it does," another says. "It used to be that it couldn't do TV; now, with VW, the scenario is it can't do big brands. We have a humungous amount of respect for the agency, but we still see it as the enemy."

CP&B came in for similar "big brand" criticism when it won Burger King. The account was said to be a curse; only a foolish agency would take it on and the account's need for solid TV campaigns would dilute CP&B's media neutral buzz-marketing work.

It answered its critics with "subservient chicken", a viral campaign to sell Burger King's chicken sandwich, which exploded into popular culture.

If there's a charge the agency is guilty of, it's that it all too often surrenders strategy in favour of a highly creative scatter-gun approach. "Have it your way" is the closest thing to an overarching strategy, and the agency didn't even create that - it resurrected it. The critics argue that cohesion is lacking in the agency's work for VW, now Kerri Martin, the VW director of brand innovation and chief CP&B champion at the car-maker, has left.

In her previous role at BMW, Martin hired CP&B to handle Mini, and moved the $350 million VW account from the ten-year incumbent, Arnold, to Miami in September 2005 without a pitch. The smart money is on a partial review, at least, a prediction fuelled by CP&B's decision to split its operations between Miami and a new office in Boulder, Colorado. It would be like Mother deciding to open a branch in Carlisle.

The official line on the second office, tucked away in the shadow of the Rocky Mountains, is that the partners wanted to offer more to their staff. They considered extra holidays and better dental plans, but, instead, opted to allow staff the freedom to choose where they wanted to live. Talk to any creatives in the US, though, and most will tell you it was Bogusky's desire to bring his children up in the mountains that led to the Boulder branch. One-hundred-and-ninety staff, many of them creatives, followed him.

"A lot of creatives are from the West Coast or just into a different lifestyle than Miami," Bogusky says. "Some of it is people who just want to be where I am, but largely, it's just people that enjoy this lifestyle."

What Boulder isn't, he stresses, is another agency; it's an office extension that just happens to be 1,700 miles round the corner. All the PCs in the buildings have webcams, which link the two homes, and there are plasma screens in both reception areas beaming live images from the respective offices to each other. "It's pretty virtual," Bogusky says. "We've been working like that for a long time."

Boulder opened in July. Spending a day wandering around the Miami office, it's clear that those who chose to remain miss Bogusky's day-to-day presence, no matter how much time he spent on the road in the past. His office feels as if it's been preserved, like a missing child's bedroom. The tricycle he rode around on is still outside his door, as are all the trophies and awards the agency has won over the years.

The agency tried empire-building before; it didn't work. Perhaps it was the inauspicious date of its launch, but the Los Angeles office, which opened on 10 September 2001, never really took off. Porter argues its relative failure - and he stresses that this is the reason he's not considering expanding the nascent UK office, which services Burger King with four staff - was a result of trying to replicate the agency model, not let it grow organically.

"It didn't work because it was hard for us to keep the level of creativity we were happy with. We had a couple of different creative directors; they were both really good, but we were never really satisfied with the consistency of the creative product," Porter says.

CP&B's failure to replicate its own model won't come as good news to those agencies desperate to emulate its success. There are some rival shops who are searching for the secret of its success, and are even trying to reverse-engineer it into their own operations.

There's probably no great mystery: CP&B just happens to have the right chemistry; that mixture of personalities that combined like a perfect storm to create the ideas that clients want. As Warren Berger, the author of a recent 432-page book charting CP&B's creative highlights, puts it: "There is no hard-and-fast formula for what CP&B does, but there's a word for it: Hoopla." Bogusky, it transpires, considers the showman PT Barnum a role model, and thinks today's marketers and promoters can learn from his methods.

That said, it is possible to pick out differences in the CP&B model when it is held up against those of more traditional creative agencies.

Account management is "content management", and feels as if it has more teeth than its UK counterparts: work is never left with clients, and is always presented, never shipped. "Content management puts the emphasis on what we're trying to do," Steinhour says. And what is that, exactly?

"It moves us away from traditional client handling. The 'service' part of account service felt outmoded to us. The people in the department are more like producers; their charge is to keep ideas alive and make them happen," he explains. The model sounds quite rigid and no doubt puts some clients' backs up. Combined with a creative approach that drills right into the client's business, does CP&B only attract a certain type of client?

Hicks agrees: "I often get the marketing person saying 'we want what you guys do, do a Mini for us', and when we try to attach to the company, it rejects us because it's not prepared to work in the ways you need to work in to create content that's relevant and useful."

Bogusky agrees, but he doesn't think CP&B is afforded any more latitude than other agencies. "You always say, 'when will that day come'," he says, "but I don't think it's true."

So far, not that radical, although Steinhour is recruiting in places less well trodden by advertising executives, particularly when it comes to those with digital expertise. There are former musicians, attorneys and writers at the agency. "We find people in non-traditional places. We're looking at the games and porn industries at the moment. We're going to grow them into the types of people we need," he says. "People who are interested in creating brands more than they are in producing advertising," Hicks explains.

Planning is yet another area where CP&B differs. For an agency with billings of more than $1 billion and a total staff of 610, a planning department of just 15 staff seems remarkably small. Perhaps this explains the lack of cohesive strategy in so many campaigns.

This being CP&B, planning isn't called planning. It's "cognitive and cultural studies". Planners are "cogs". While some of them are from traditional planning backgrounds, many are former academics with degrees in psychology or anthropology. There's also a strategic advisory board, a kind of academic brains trust of chairs of university departments, paid to answer requests for insights. The most recent, for Burger King, asked for their thoughts on American fast-food culture. They came back with a treatise on the American culture of "fast".

Bogusky and Tom Birk, the department's director, renamed it because they decided what they did was so different from traditional planning departments. "We believe cultural insights are more powerful," Birk says.

He cites the example of Mini. CP&B won the launch of the iconic car in the US, a task that was eventually expanded to see it rolled out across 60 territories. Had it followed the traditional research route, consumers would have rejected the brand, he argues. It's everything the traditional American driver traditionally hated: it's small and friendly.

Instead, the cogs came up with a strategy based around an alternative driving culture. A poster campaign urged drivers "let's sip, not guzzle"; "let's reclaim our garage space"; and "let's put away the middle finger".

"Our gut feeling was that there was a latent demand for an alternative driving culture, because the existing driving culture in the US was so screwed up," Birk says.

Whether or not the agency will be able to replicate the success with VW is a moot point. Its most recent ad for the car-maker was axed after complaints from mental health organisations, voicing objections to its "man-plotting-suicide-has-change-of-heart-when-he-sees-new-VW-prices" message.

Like any ad agency, CP&B has had its failures over the years, but given the sheer amount of work that's come out of the shop, it's had more hits than many of its peers. Bogusky argues it's an occupational hazard: "You're making mistakes all the time and refining what you do. You're working on how you interface with your clients to try to be successful, because they all have different structures and ways of working.

"We don't have any trademarks, we just have a different way of doing things. We're just trying to find the right place to be and not to repeat what we did before."