Close-Up: Live Issue - Gum hopes to make content chimera a reality

Gum, Saatchi & Saatchi's branded content division, has launched with the feel of a revolution in the making.

There are some in the ad industry who think branded content is a chimera, whose impact on advertising will be as dramatic and short-lived as that of the late 90s dotcom bubble.

But Lee Daley, Saatchi & Saatchi's chairman and chief executive, believes so much in branded content that he has invested almost a year of planning and a lot of money into developing the agency's own branded content and entertainment division, Gum.

Startlingly, Daley admits that the importance of branded content at the moment is overstated. But he also thinks that it's going to play a massive role in the future.

"Branded content is the advertising version of the whole dotcom wank," he says. "But it is going to happen, so agencies need to be ready. It's still ethereal, but there is an awful lot of curiosity about it. It's an historical inevitability - mass-market audiences are declining and we have to find new ways to reach specific audiences."

The mission of Gum, in the agency's own description, is: "To help clients achieve significant cut-through with leading-edge, young, urban consumers in the context of ever-increasing media fragmentation, the emergence of digital and wireless technologies and cynicism towards traditional marketing." Phew. Its first clients are Canon, T-Mobile and DeLaCour.

The feeling of a revolution in the making is palpable throughout the Gum experience. Even the famous old Saatchis pub, the Pregnant Man, wasn't spared the revolutionary sword. Its wooden panels and frothing ales have made way for white walls, big speakers and projectors, which didn't go down too well with some of the old guard.

"From a Saatchi & Saatchi point of view, what I've done here is fucking sacrilege. Old Saatchis people were ringing and complaining about the renovation," Daley says.

Development on Gum started in December last year and it was launched to the agency this August. The official launch took place last Thursday evening, with a party that almost lived up to the hype smothered liberally over the venture by the Saatchis top brass.

Clients, staff and assorted minor celebrities, including Colin Jackson and Chris Eubank, guzzled Champagne until the early hours in the refurbished Pregnant Man.

The offices upstairs have been turned into a workspace called The Sweatshop.

In here is a performance space with music mixing desks and photography and live TV facilities, where the creatives behind the venture produce most of Gum's work.

The infrastructure of the physical set-up could be in danger of straying on to the wrong side of pretentious, but Daley is adamant that Gum's offering ensures it is more than style over content.

Saatchis has spent a huge proportion of the set-up time trying to achieve some point of differentiation between Gum and the ever-growing number of branded content shops. Gum offers clients the chance to promote their brands through a wide range of media, including music, films, gaming, events and wireless technology.

The agency has forged deals with partners from across the globe to offer clients a broad range of promotion for their brands in each medium. These range from closer links with its sister Publicis agency Starcom, to preferred partner deals with the production company Glassworks, the events organiser Innovision, the American music producer Dallas Austin, the ex-Radio 1 DJ Lisa I'Anson and the modelling agent Paulo Sella.

"It was a strange but rewarding experience to sit with Dallas Austin, an American music super-producer, and talk about branding for Comet," Daley says.

Saatchis has made the decision that for the first 18 months of its life, Gum would only target young, urban consumers, and is looking for clients who want to push their brands at this group.

The venture's managing director is Andrew Wilkie. He's joined by Sahar Shaker, Gum's director of strategy. And Daley has recruited two equity partners from outside the ad industry, Andreas Neumann and Amos, to improve Gum's knowledge of popular culture.

Amos brings with him an interesting background - at the age of 13 he was spotted by Boy George on the South London club scene and was brought into his band Culture Club with the name Captain Crucial. He then started producing his own music and formed a band with Ringo Starr's son Zak Starkey, which had some success in Japan.

At the same time, he worked as a creative consultant to many major record labels, helping them connect their acts to the urban market. His knowledge of urban culture is rooted in his childhood - his mother is Erin Pizzey, a feminist who founded the first women's refuge for battered women in 1971, and when he was growing up she adopted three West Indian children who became his brothers. He is also engaged to Lisa I'Anson and they have two children together.

Neumann, also known as Dre, began his career by founding an advertising production company in his native Munich. He then moved to Grey and became its head of TV at the tender age of 27.

In 1999, he produced the first 360-degree movie, for Volkswagen, with a budget of £7 million. A cinema had to be purpose-built for the film to be screened - it lasted just seven minutes but was seen by more than four million people.

Neumann then turned to music and started producing with the Berman Brothers.

He made records for Mica Paris and annoyed the entire world with the Baha Men, who were responsible for the number-one single Who Let the Dogs Out?, for which he won a Grammy. And he lives with the singer Mica Paris, who performed at the launch party.

Daley says: "This market is massively fragmented. To target it effectively, we need to find out what these groups want without pushing into their lives. This group is massively cynical towards advertising and marketing and is fully versed in different media. We look at influences that fuel their culture, including the communication platforms."

However, just firing a million messages through ten different media channels at a fragmented youth audience is not going to be effective enough for clients, so Saatchis has based the Gum offering on a strategic plan that ensures accountability. "The strategic model is important to the credibility of it. A lot of clients are multinational and global. We can make sure that if they are pushing into entertainment, there are no geographical boundaries. We can build unique metrics to what we decide and what the client needs and there is a real possibility that the client can get fiscal return as well as brand recognition," Daley says.

Saatchis is following Leo Burnett into the branded content arena - Burnett launched its Spring London division in 2002. Chris Harrison, the managing director of Spring London, is supportive of the move.

"I think it is great news for the industry that another agency is getting involved. The more people who know about branded content the better. It's a sound idea and they'll need a bit of time to find their feet," he says.

The entire Saatchis management team claims to be committed to Gum and Daley is confident that many more agencies will follow down the branded content route. However, he is also aware that, just like the dotcom boom, it could all go wrong and that Saatchis still needs to knuckle down with bread-and-butter advertising.

"Advertising focused on service is becoming a redundant business model, but we'll have to continue working in conventional channels. I am positive this is changing. But, from a client point of view, there is still a lot of nervousness, so it may take some time," he concludes.