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Abstract: The case deals with Anomaly, a unique organization that claimed to be not "just an [advertising] agency, an incubator or a brand-strategy shop..." but all of these. It describes Anomaly's business model, including the kind of solutions it provided to clients, the manner in which it earned revenues, and its emphasis on creating Intellectual Property (IP). Issues: Identify the forces that are changing the traditional advertising model in today's economic environment. Understand the structure and practices of an innovative firm that is attempting to adapt to the new realities in advertising. Introduction In March 2009, Anomaly, an advertising and marketing company, launched a line of cosmetics called 'By Lauren Luke' in collaboration with Zorbit Resources Inc. (Zorbit)4 and Lauren Luke (Luke), a well-known beauty expert. Anomaly, Luke and Zorbit were shareholders in Soho Beauty LLC, the company which managed 'By Lauren Luke'. For this venture, Anomaly had been responsible for formulating the business strategy, category marketing, branding, audience strategy and communications. One of the owners of Anomaly, Carl Johnson (Johnson) explained, "We conceived the business and now we manage the overall business. We work as the marketing director and general manager. We oversee everything from banking, Web and production to design."5 Anomaly was established in 2004 in New York by a group of experienced admen. The firm had an unconventional approach to business. Aside from developing marketing campaigns for clients, Anomaly also served as a venture capitalist/brand incubator who worked with clients or on its own to develop new products and build new brands. It aspired to create Intellectual Property (IP) both for itself and its clients, which could be licensed to third parties for a fee. It did not follow the customary pricing by the hour system followed by most ad agencies, choosing instead to enter into customized compensation agreements with its clients. Anomaly also claimed to have a diverse skill set, as compared to other ad agencies, with specialists in areas ranging from product design to mobile technology, on its staff.

Over the years, Anomaly had worked with well known companies like The Coca Cola Company (Coke), Virgin America Inc. (Virgin America) , etc., apart from several other small and upcoming companies... Not Just another Ad Agency In 1988, Johnson and four other admen started an ad agency called Simons Palmer Denton Clemmow & Johnson. In 1997, the agency was sold to TBWA. While his co-founders went their separate ways, Johnson stayed on, and began working at TBWA. In 2002, Johnson left TBWA. At the time, he was the COO of TBWA and President of the American division of TBWA, called TBWA\Chiat\Day. In June 2004, Johnson, along with Ernest Lupinacci, Andrew Kibble, Jason DeLand (DeLand), Johnny Vulkan (Vulkan) and Justin Barocas - all admen from reputed ad agencies - started Anomaly in New York