Carbon14 is a tiny, design-oriented advertising agency that has dominated the Memphis Advertising Federation Awards (Addys) for the past two years. Formed from three previously existing companies — Combustion Design, Sideshow Media, and the Stinson Liles Group — at the end of 2000 Carbon14 has quickly moved from relative obscurity to become one of the most recognized agencies in town. So what’s their secret?

Thinking small.

In 2000, the digital revolution was still in full swing and Web-based businesses were still considered “way cool.” Nike’s successful “Just do it” campaign became a gold standard. Advertising dollars flowed like top-shelf martinis as agencies of every stripe and size expanded and hustled to stay ahead of the tech explosion by developing increasingly complex — and expensive — Web divisions.

Two years later, that’s all ancient history. Carbon14 experienced only one quarter of boom-time before the economy cooled, taking much of the advertising business with it.

Advertising Age reported in December 2001 that 17,800 ad-related jobs had been eliminated in the previous year. At the beginning of 2002, industry reports called 2001 the worst year for advertising revenues since the stock-market crash of 1929.

The founders of Carbon14 seemingly had picked the worst possible time to establish a new agency. But while larger agencies were forced to cut back and regroup, Carbon14 managed to hang on and prosper. By concentrating on excellent design, they began to build a reputation while carving a niche that could serve as a model for other young companies beset by the current recession.

As the late Ken Sossaman, founder of Sossaman and Associates, said when he accepted the Silver Medal for Lifetime Achievement from the Memphis Advertising Federation in January 2002: “After the year we’ve had, I think anyone left standing should get one of these.”

His comments were greeted with a silent (or, perhaps, not so silent) round of “Amens.” Sossaman’s 15-year-old agency was just one of several forced to cut back on staff in the past year. Oden Marketing experienced the first layoffs in that agency’s 31-year history. Good Advertising likewise saw cuts in personnel, as did Thompson & Company and O’Connor Kenny, to name only a few.

“[Last year] was a dreadful year for our industry,” says Archer/Malmo president Russ Williams. A/M, Memphis’ oldest and largest agency, was fortunate enough not to experience layoffs or hiring freezes during the recent economic downturn. “We were insulated from the downturn for three reasons,” Williamssays. “First, most of our clients remained quite healthy despite the economy. Second, our business-development efforts yielded enough new business to offset any impact. Finally, we did not get caught up in the dot boom, so we didn’t have to worry about the dot bomb.”

For the most part, local companies that were similarly insulated have also performed well in spite of the market. Some, Carpenter/Sullivan, for example, which recently expanded into a new downtown office space, have even grown in the midst of recession. Since most of its clients were not tech-oriented, most were not drastically hurt by the economy.

“We saw a significant increase in revenues generated from increased spending by our existing clients and some exciting new business wins,” says C/S principal Brian Sullivan of his group’s relative prosperity in otherwise hard times. “Our clients understand the return on investment they can get from effective communication with employees, clients, and prospects.They also understand you can’t save your way out of a downturn.”

Even given the relative success of these agencies, Carbon14’s emergence from the pack is still phenomenal. In 2001, the group took home 43 gold Addys (out of 86), including Best of Show. This year, the young agency was again clearly the evening’s biggest winner with 33 golds and another Best of Show.

The Addys, as Carbon14 principal Billy Riley quickly points out, are judged primarily on aesthetics and do not necessarily reflect any extraordinary impact on the market.

The awards do serve a purpose though. They confirm what appears to be the young agency’s fundamental belief: “Find out what you are and be it,” says principal Stinson Liles. “Be it unashamedly. If you try to be everything to everybody, you end up being nothing to nobody. If you are the small guy, be the small guy. If you are cool and high-tech, be that. If you have a generic message that you think appeals to all people, it ends up just being crickets chirping.”

As metaphysical as it may sound, this credo may well be the reason why the new agency fared so well while ad spending went sliding downhill.

With a roster of 12 employees, only one of whom is responsible for anything other than creative output, Carbon14 is clearly the small guy in this picture. And unabashedly so.

“Getting lean early and staying that way is a lot more powerful than being in the hole and having to make drastic cuts,” says principal Martin Wilford. “Fortunately, when the recession hit, we weren’t in the middle of subsidizing an expansion or paying for an Internet division. Such have been the great advantages of arriving at the end of a boom era, rather than the beginning or middle.”

“But running a business in a down economy? We didn’t even know what that was, what it felt like, or what it meant,” says Liles. “As far as we were concerned, the economy always grew.”

The principals at Carbon14 give abundant thanks to their elders, notably the late Ken Sossaman, Dan Conaway at Conaway Brown, Thompson & Company’s founder Michael Thompson, and various others at Archer/Malmo for setting the basic business standards that have helped guide them through tight spots. But they stress that their agency’s smallness is more a matter of choice than circumstance.

“We were lucky,” Riley says, “because that was kind of our philosophy anyway. We were rooted in the sense that if you stay small you do better work.” It also means there are some accounts you can pretty much write off.

“We will never get First Tennessee as an account,” he adds. “Not that we wouldn’t want it, but we would have to triple our staff just to service an account like that. And that’s not what we want to do.”

What do they want to do? Help others do what Carbon14 has done for itself, of course: to become who they are and to be that unashamedly. Being small-minded, so to speak, the agency tries to focus on the smallest components first: product and packaging.

“Most agencies try to get you to do TV, print ads,” Wilford says, “in order to drive people to where the product is. We love the idea of starting with the product, making it just a knockout on the shelf. Then [we ask what] we can do to the shelf itself or the area around the shelf. Then, if there is more money, we’ll do some ads. So you work in concentric circles outward from the product.”

“If you’ve only got 15 grand to spend extra,” Liles says, “that’s nothing, a drop in the bucket. But you can geta package redesign for that. And that’s going to make the product jump.”

On the subject of products that jump, the Graceland bilboard campaign is certainly the most visible example of Carbon14’s obsession with the subtleties of identity. It is another example of how well a small, focused group can perform for a client. Carbon14 encouraged everyone on staff to take a crack at developing a campaign. Designers took a shot at copy writing, and copywriters offered design concepts. A kind of competitive spirit took over, resulting in 35 potential billboards. The only thread connecting the individual efforts was reverence for the subject at hand.

“The sort of people who have a real firsthand memory of Elvis and what Elvis was all about are getting older and moving out of the marketing base and the tourist base,” says Liles. “Now you’ve got to sell this young audience on Elvis. But you can’t just trot out a 1970s jumpsuit and make fun of it. So we worked for a long time to try to find this mystical way to get our hands around what Elvis was all about.”

“There are all these ways to say how cool Elvis is without mentioning fried peanut-butter sandwiches,” Riley adds. “And we wanted to make that clear. So Elvis Presley Enterprises trusted us immediately.”

The results were provocative — and effective: “See what Elvis didn’t give away,” one ad read, an homage to the King’s fabled generosity. Another pair of billboards worked together, one with images of Elvis seen only from the waist up and the teaser: “See what the censors were afraid to show.” The second board is all pelvis.

A billboard for the Heartbreak Hotel proclaims: “Stay any closer to Graceland and you’ll be trespassing.” It’s a sincere campaign that only once veers toward schmaltzy, with the phrase “Elvis will never leave this building.”

“[This kind of reverent sincerity] is coming back now,” says Liles, admitting that when the economy was strong, too much advertising had become ironic or, at the very least, clever to a fault. “It’s part of this whole notion of [an agency’s] accountability. At the end of the day, a campaign has to work. Budgets are so tight and there is really no choice.”

In archaeological terms, Carbon14 is the organic matter that is left when everything else is gone. As Riley says, “It’s evidence of life itself.” It appears that Carbon14 is here for the duration. Unlike some of Memphis’ larger and mid-sized firms, the course Carbon14 has charted seems resilient enough to weather the current economic dip unscathed. The boatload of Addys they have won in the last two years speaks well for the company’s craftsmanship. By remaining as small as possible and chipping away at pieces of the market, Carbon14 and similarly small agencies may even have a bit of an edge if the economy remains sketchy.

“What’s happening in the industry nationwide is this whole concept of unbundling,” Liles says. “People aren’t going to full-service agencies for design and advertising and PR and direct mail and Internet and all that stuff like they did before. Rather, they are looking at who might help me with this and who might help me with that.” Liles believes that “this and that” are exactly the sorts of services his company can best provide.

“Carbon14 is doing excellent work and they deserve the recognition they have achieved,” says Russ Williams. “[While] pure creativity may not be the only component to effective marketing, it is one of the most important. At the end of the day, the most successful agencies are generally the ones that deliver the best creative.”