Inside Vice’s plans for Virtue in Canada

How the media co's in-house ad agency aims to be a millennial specialist, and why it won't try to steal AOR business.

Pictured: Shawn Phelan, VP of business development at Vice Media (left) and Badr El Fekkak, VP and managing director of Virtue Worldwide in Canada.

For anyone familiar with the reputation Vice has cultivated as a disruptor, it might be surprising to hear that Virtue, its freshly minted in-house ad agency, is willing to play nice.

“We’re not here to replace anyone as an agency of record [in Canada],” says Badr El Fekkak, VP and managing director of Virtue in Canada. “There are certain elements of that work that we’re not built to serve, and we’re not necessarily planning to be.”

Virtue has existed for more than a decade in Vice’s New York office, but in January, it was essentially relaunched as a full-blown in-house agency network. The global initiative brought the company’s existing ad-focused divisions together with recent agency acquisitions under the Virtue banner.

The new Virtue has since been rolling out in more than 30 markets, winning work including a global AOR assignment with Vancouver’s Lululemon and creating the company’s first global brand campaign.

Within Canada, the rollout began in February when El Fekkak joined Vice Canada to lead Virtue. He came from Bleublancrouge, where he spent a year as VP of strategic planning after various strategy roles at agencies including Cossette and Bob. Since then, the agency has grown to roughly 20 staff members, with plans to further expand, particularly with strategic talent.

Whereas the Vice Media arm is already known for producing sponsored documentary-style videos or written editorial content for clients including UbisoftBMO and General Mills, the goal with Virtue is to be a specialized expert at reaching the coveted millennial audience, in whatever form that may take.

“We’re not a subject matter or platform specialist,” El Fekkak says. “Obviously, we do ‘the Vice way’ really well, but when we need to do something else, we will. What we are trying to offer is rejuvenation and relevance with the 18-to-34 segment. We see ourselves as a specialist agency that caters to youth.”

Despite being a global decision, Shawn Phelan, VP of business development at Vice Media, says the new Virtue offers a specific benefit for Vice in Canada, namely the ability to go client-direct. Phelan says Vice is on track to produce “at least 250 pieces of sponsored content this year,” but the majority of that work is coming through partnerships with creative and media agencies.

“The [Vice] Media side of the business is very transactional, and the chance to form deeper, long-lasting relationships with brand clients was a challenge for us,” Phelan says. “At the same time, the shark has to keep swimming, and we had to keep going to the next transaction and the next RFP. Sometimes we’re answering six or seven in a week. That doesn’t allow for deeper conversations that an agency like Virtue now can engage in.”

Despite that, El Fekkak says pursuing AOR-style relationships in the Canadian market is not a major priority, at least for the time being. Brands have different layers of marketing, and El Fekkak is content with Virtue falling into only some of those layers. He describes it as being part of a solution that can work within a strategic framework, whether led by the AOR or created in tandem with Virtue’s expertise.

An example of that kind of relationship is with Fido. Virtue worked closely with the brand’s AOR, Taxi, on the new “Go Get It” brand platform that launched earlier this year. That campaign shifted the focus from functional benefits toward how the brand helps customers chase their passions, whatever they might be (it should be noted Fido parent company, Rogers, made a heavy investment into Vice’s Canadian operation in 2014).

“Working with Taxi, we’ve managed to move a brand that was positioned as a discount and price-point brand into more of an aspirational brand,” El Fekkak says. “That’s not just about the media spend, it’s providing strategic thinking about the brand and that target. We do a lot directly with Fido and the clients there, but we also make sure everything we do aligns with what Taxi is doing at the same time.”

Virtue is joining a crowded ad agency landscape where more companies are going after business that would have typically only been accessible to traditional creative and integrated agencies, such as the PR shops and multinational consultancy firms that have been building out their own creative departments. There is also a crop of new start-up agencies built on project-based models to be more flexible and agile in how they work. El Fekkak believes nimbleness is a strength of Virtue as well, but being backed by Vice’s years of experience with the millennial market gives it the added ability to establish itself as a specialist agency.

“We’re not incumbents, so it’s a lot easier for us to build to service a need, as opposed to transforming to serve it,” he says. “We’re already seeing a lot of clients using more specialized partners instead of one large machine that can do everything. It’s going to be harder and harder for one agency be everything for a brand.”

Vice Media continues to operate as normal, shepherding and developing sponsored content that lives on its channels, be it a digital platform, the recently re-launched magazine or year-old cable channel. That’s still in high demand from brands, as Vice Media is built to be “a content machine” that can help brands always be on, at scale and for a lower cost, Phelan says. But the addition of Virtue makes for a much more compelling, holistic offering for any brand looking to reach millennials.

“After some of our sales meetings with clients, we walk out and realize they could use a follow-up meeting with Virtue,” Phelan says. “Maybe they need more insights into that target than we can provide, or their strategy could use some fine-tuning. Likewise, when Virtue talks to clients, if they are looking to reach 18- to 34-year-olds, they are probably going to land with some kind of content on one of our channels. The businesses are really strong complements to each other and offer something really unique in this marketplace.”