Editor’s Note: The pioneering founder of Ford Models, Eileen Ford, passed away this week after a career that spanned four decades--and dramatically altered the modeling world. Below, we dipped into our archives to showcase how the agency she founded is still is changing the modeling industry today.

Clothes made from recycled materials can, as it turns out, be a little itchy. Still, Jackie Stewart is determined to dwell on the positive, and so she is chatting engagingly about what she is wearing, a dress by designer Kate Goldwater constructed from scraps of fabric. She points out that in addition to striking a blow for mother earth, it fits well and is brightly colored. The dress does, in fact, look great on her, though Stewart, absurdly long-legged, breezily poised, and pretty in a way that somehow seems both Midwestern and exotic, would probably make a dress put together from inner tubes look smart.

Stewart is so comfortable talking up green style that it's easy to forget she is on a set being filmed, until director Damian Weyand interrupts to suggest she not flourish her arms to call attention to the dress. "It's a little too Price Is Right," he says. "We just want you to be Jackie, not spokesy."

Just being Jackie isn't the sort of thing normally asked of Stewart. She's a professional model in the stable of Ford Models, the storied agency that for six decades has been a headquarters for many of the fashion world's most memorable faces. Ford, in fact, is producing this 83-second video--one of more than 1,000 the agency has made featuring its models gabbing informally about style, hitting the racks at clothing boutiques, sweating through workouts, and hanging out backstage at fashion shows and photo shoots. The videos have become a new-media hit, turning up all over the Web. On YouTube, some have garnered as many as a million views, making Ford's videos YouTube's third-most-popular destination.

At a time when companies from all industries are struggling to tap the marketing power of the Internet, Ford seems to have cracked the code. In doing so, it has transformed itself from an old-line modeling agency rooted in providing personnel to fashion-show runways, magazines, and mail-order catalogs into a hit new-media production company. Its audience extends far beyond teenage girls. Advertising agencies, apparel manufacturers, and retailers, eager to connect with consumers online, also are calling--not only to hire models but also to sponsor videos. Revenue is up 140 percent over the past five years. And in December, the company announced that it had received a "significant" investment from Stone Tower Capital, a New York investment firm that manages more than $14 billion in assets--funds that will allow Ford to burnish its online brand even more.

Now, instead of merely serving the fashion influencers, Ford has become a leading digital-age fashion influencer. "I can't think of many other companies that have been as savvy as Ford in marketing themselves online," says Pamela Seidman, director of communications for Express, the 500-store fashion retailer. Ford's success is strong evidence that the online world has barely begun to reveal all the surprising opportunities open to businesses. It also demonstrates that there's no telling which are best positioned to take advantage of them.

An outsider might imagine the Ford headquarters as a den of icy, gorgeous high style. But it turns out to be surprisingly friendly and down to earth--stylish in a funky rather than fashion-obsessed way, with bookers, models, and clients all mingling. That informal atmosphere is encouraged by Ford's CEO, John Caplan, who joined the agency five years ago. Caplan, 38, has no formal background in fashion. Rather, he started his career, in the early 1990s, in advertising, helping to build the Starbucks (NASDAQ:SBUX) and AriZona Iced Tea brands. In 1996, he joined the dot-com boom as a marketing executive at About.com. He rose to the rank of president before leaving in 2001, after the company was acquired by publisher Primedia for more than $500 million.

Meanwhile, Ford Models remained an industry icon, albeit an increasingly embattled one. It was founded, in 1946, in New York, as one of the first modeling agencies, by former model and fashion reporter Eileen Ford and her husband, Jerry. Eileen became famous not only for her ability to spot photogenic bone structures but also for the protective and demanding attention she lavished on her mostly teenage talent, often taking models in to live at her home. The company quickly came to dominate the business and over the decades commanded top attention as well as top dollar for names such as Cheryl Tiegs, Christie Brinkley, Ali MacGraw, Rene Russo, and Jerry Hall, all while remaining under family control.

In 1996, Katie Ford took the reins from her parents. The agency was facing stiff competition for the most promising new models from several directions, including large rivals like Elite, a growing horde of boutique agencies, and powerful sports and Hollywood talent management firms like IMG, which were expanding into fashion. Ford, who holds an M.B.A. from Columbia University, attempted to put the company on more solid footing by seeking a merger with another player in the talent management business. She negotiated a deal, in 2000, to sell a majority interest in Ford for a reported $22 million to Magnum Sports & Entertainment, which specialized in representing athletes. But the deal fell through.

By then it was clear that most media-driven businesses were relentlessly being pushed willy-nilly onto the Web, and it seemed to Ford that fashion would inevitably be forced to follow--and that perhaps there was an opportunity to lead the charge. Ford Models, she decided, needed a new-media makeover, and a headhunter pointed her to Caplan, who joined as chief operating officer in 2002.

His first move was to tweak the core business: booking jobs for 2,200 models, hairstylists, makeup artists, photographers, and other talent, a business that comprises some 65,000 transactions a year in 14 offices around the world. He moved the New York headquarters from its legendary two-floor digs in SoHo to a new headquarters uptown, where the 90 bookers would be closer to the media and fashion action. A new state-of-the-art booking system put a wide range of data at bookers' fingertips.

But Caplan knew he hadn't been brought to Ford to tinker with the booking business. "I had another mountain to climb," he says. Could Ford Models profitably enter the new-media world? To help spearhead that effort, Caplan tapped Mitch Grossbach, who had been an executive at a customer relationship management software company called Interface Software, to head a new digital division. What would it mean for a modeling agency to go digital? Grossbach had some ideas. "If you could take the static world of photos and catalogs and bring it to life by making it dynamic and interactive, you'd have a whole new business," he says. That meant video, of course, though it wasn't immediately clear what Ford was supposed to make videos of or how to make them pay off for the business.

One obvious move was to start taping "live casting" sessions, in which models audition for jobs by responding to a director's instructions while being photographed. You might think that still photographs themselves would do the trick, but in fact directors put huge stock in how a model behaves. "Personality is everything with a model," says Paulette Ellison, a manager in the model-booking side of Ford's business. "Sure, looks are important, but you'll be spending 10 hours with the model on the set, so you want to know what they're like." Now, online casting videos are an important element in each Ford model's portfolio.

While casting videos were a nice tweak, it wouldn't move the needle much for the business. Caplan and Grossbach were after something that would build the Ford brand online. Unfortunately, fashion isn't easily webified. Exquisitely shot high glamour doesn't jump smoothly from the pages of glossy magazines to the relatively low-resolution and low-brow Internet, with its schlock dancing-cartoon-character banner ads.

Meanwhile, the way in which the modeling business had leaped to television was, to Caplan, less an inspiration than a cautionary tale. In late 2005, Jordan Hoffner, at that time an executive at NBC Universal, tried to persuade Caplan to collaborate on a television show featuring Ford models. Shows like Bravo's Project Runway and TLC's What Not to Wear were big hits. But the talks went nowhere. Part of the problem was that Caplan was appalled at the general tenor of fashion reality shows. "It's train-wreck television," he says, noting that the shows tend to emphasize competition, conflict, backstabbing, criticism, and snotty behavior--not qualities that he was eager to associate with the Ford brand. What's more, if Ford Models was to be involved in any sort of media production, Caplan wanted the agency to retain ownership. And that doesn't happen on TV.

In the fall of 2006, Hoffner and Caplan met again. But this time Hoffner was an executive at Google (NASDAQ:GOOG). He'd joined a month before its acquisition of YouTube and was serving as the video-sharing site's head of content partnerships. And Caplan had an idea to bounce off him: What if Ford began supplying short videos featuring models in informal settings demonstrating beauty and shopping tips? That sounded fine to Hoffner, who assured him YouTube could help promote the videos on its homepage and elsewhere.

What Caplan and Grossbach envisioned were videos that showed what models are really like when they aren't posing at shoots or on the runway. If that doesn't sound immediately compelling, it probably would if you worked a shift in Ford's mailroom. "Thousands of people apply to be models every single day--and that's without any advertising," says Grossbach. Indeed, Seventeen magazine, the fashion bible for the teen crowd with more than 13 million readers, conducted an online survey in May and found that 85 percent of its readers dream of being models.

The way Caplan saw it, online exposure and a chance to build a bit of a fan base would be great for some of Ford's up-and-coming talent, in that it might lead to more work. And, of course, Ford would own the clips. But there was something else. "People look at what our models wear, what music they listen to, and want to follow," says Grossbach. "How many brands can act as influencers that way? Our business is built around some of the most attractive people on the planet. We're global authorities on fashion, trends, and style. That's a pretty interesting set of assets to work with, wouldn't you say?"

The first videos were shot in Ford's offices. But since early 2007, the agency has been using professional facilities, such as Neo Studios in New York's NoHo neighborhood. It's a modest space, the size of a large living room, stocked with backdrops and fashion props like dress racks and plenty of lights. Ford's videos aren't intended to blend in with the typical YouTube fare--which Caplan characterizes as "two guys driving a bike into a wall." They're well lighted, with crisp editing and often a slick soundtrack. Still, the overall feeling is friendly, informal. "It's just me, trying on a dress," says Alejandra Cata, a model who appears in several popular videos, some of which have been viewed upward of 600,000 times. "I didn't think it would get that kind of response," she says.

The models are attractive, of course, but it's not about ogling good-looking people. (Which isn't to say there isn't a certain amount of ogling going on, as is apparent from some of the comments on videos involving on-camera clothing changes or bikinis.) But any overlap with the Victoria's Secret and Sports Illustrated swimsuit issue crowd is unintentional. Why would Ford want to put out soft porn? It isn't selling lingerie or subscriptions.

What Ford is selling--via videos featuring models demonstrating the perfect hair curl or selecting the right top for black jeans or exfoliating lips--is expertise. People want to be more attractive and stylish, and though they can get tips from magazines and television shows, the Ford videos have a more candid, friends-sharing-secrets feel that, somewhat paradoxically, lends authority. "This is stuff our models know about," says Liz Edelstein, a video talent coordinator at the agency. "They can explain why one top works and another doesn't." What's more, the videos cost as little as $200 to produce, which means that Ford can churn out one or two a day. Viewers range from preteens to women in their 40s, thanks partly to partnerships with MySpace and iVillage, respectively.

Of course, creating popular videos is far from the hardest part of the equation. "The real challenge," says YouTube's Hoffner, "is how do you create a sustainable business around it?" Fortunately for Ford, the people who watch its videos also tend to spend like crazy on clothes and cosmetics. And a lot of that spending is moving online. Marketing consultancy Forrester Research (NASDAQ:FORR) calculates that beauty product sales on the Web jumped 22 percent in 2006 and expects them to post another 25 percent increase in 2007.

It's no secret that marketers lust after opportunities to integrate advertising with entertainment. But most content producers wisely fear viewer ire when it comes to adulterating their efforts with bought themes. It would be hard to take Dr. Phil seriously if he kept pushing Verizon phones on his hapless guests. But Ford is relatively free to peddle the themes of its videos to sponsors. Who's going to object? If you enjoy watching models, you're not going to mind if they fuss over Armani or Dior.

That line of thinking isn't lost on retailers like Express's Pamela Seidman. Her office is in the same building as Ford Models, and nearly every Thursday she ends up stuffed on the elevator with a crowd of young women going in and out of Ford's weekly open casting call. "I kept thinking that these women should be shopping at our store across the street," Seidman says. "And I knew the way to reach them was online." Last spring, she set up a meeting with Caplan and Grossbach to explore ways for Express to integrate a planned campaign for jeans with Ford videos. "People don't pay as much attention to a brand when it's the brand doing the talking," Seidman says. "What people listen to are neutral influencers, and models are perfect for that."

Ford agreed to make four videos about jeans; in one, two models happen to mention that they picked up their pants at Express. On some sites, viewers were offered the chance to win a gig as a stylist at a photo shoot--and a shopping excursion at Express. Also included: a $20 coupon that brought in $500,000 in register sales in one month, the bulk of the sum from people who had never before shopped at Express.

Online fashion purveyor Bluefly paid Ford to create a series of videos of models rummaging through its offerings and singing the praises of the merchandise while offering various tips on style. On some sites, viewers who liked what they saw in the video were able to click on a button to be whisked straight to Bluefly to start shopping. Jackie Stewart's video about green fashion, meanwhile, was sponsored by the Weather Channel, which is seeking to align its brand with environmental themes online. Nestlé paid Ford to show its Poland Spring water being handed out to aspiring models, a video that was viewed more than 132,000 times.

Grossbach won't say how much Ford charges sponsors, but he claims that the video business is already solidly in the black. In addition to integrating video content with marketing themes, Ford also offers marketers a chance to get its messages into e-mails sent under the Ford banner to hundreds of thousands of wannabe models in the agency's database. That's an appealing prospect for Jonathan Sackett, who heads digital marketing for advertising agency Arnold Worldwide. "Third-party advocacy is always going to deliver a stronger message than anything an Armani can do itself," Sackett says.

At the same time, of course, Ford has to tread carefully. Even though fans may be troubled not a whit to see their fashion idols chattily touting various brands, trust and interest will erode the instant they sense that models are simply shills for products. In other words, once the videos start to feel like commercials, the game is over. Ford executives are keenly aware of this danger. The topics and settings of the videos are negotiable, but the models' comments and actions are not. "This isn't advertising; it's not product placement," Grossbach says. "It's organic product integration. Bluefly didn't tell our models what to say. And if they had tried to, we'd have told them to go shoot a commercial."

Contributing editor David H. Freedman wrote about serial CEO Bob Cramer for Inc.'s January 2008 issue.

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