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Hub ad firm Modernista to close down

By Katie Johnston Chase
Globe Staff / April 28, 2011

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Boston ad agency Modernista is closing its doors tomorrow, after losing its biggest accounts, its cofounder, and the majority of its staff in the past few years.

“If it’s not going to be a creative powerhouse or the place where the best creative people are, I don’t want to run a business,’’ said cofounder Gary Koepke.

Modernista suffered a major blow in late 2009 when it was dropped by General Motors Corp.’s Hummer and Cadillac brands, its biggest account. Smartphone maker Palm Inc. and financial services firm TIAA-CREF followed in the span of a year and a half.

“It was just kaboom, kaboom, kaboom,’’ said Koepke, the founding creative director of Vibe magazine who started Modernista with “$40,000 and a chair’’ and is considering launching another advertising business.

As business declined, the boutique firm known for edgy ad campaigns began to lose talent. In January, cofounder Lance Jensen left unexpectedly to join the advertising firm Hill Holliday. Meanwhile, staff numbers dwindled to 10 from a high of about 180 at offices in Boston, Detroit, and Amsterdam.

Some in the local advertising community have speculated that Modernista was overly dependent on a few clients in volatile industries.

“You wonder if maybe they grew too fast or if maybe GM became too important of a client, and we saw what happened in the automotive industry,’’ said Kathy Kiely, president of the Ad Club, a Boston trade organization. “I think it was partly the economy and partly their client mix.’’

Modernista landed big clients soon after opening in 2000, including Gap Inc. and MTV. One of the company’s more memorable Gap ads featured Will Ferrell dressed up like Neil Diamond singing “Forever in Blue Jeans.’’

“They actually raised the profile of the Boston creative community, just because the work was so high profile,’’ said David Swaebe, a spokesman for Mullen, which has hired about 10 former Modernista employees in the past year.

Despite Modernista’s closure, the local advertising industry is booming, Kiely said, citing major national brands that have recently signed on with Boston agencies, including Major League Baseball at Hill Holliday, the insurance company Aetna at Arnold Worldwide, and Barnes & Noble and Fage yogurt at Mullen.

“I think Boston has never been a stronger advertising community than it is now,’’ Kiely said.

Katie Johnston Chase can be reached at johnstonchase@globe.com.