It would be easy to see Kraft Foods Inc.'s restructuring as another example of the hollowing out of Corporate Canada.
As part of a North American strategy to cut costs, the food giant announced plans in October to merge its Canadian business into its Illinois headquarters.
But behind the scenes, a Toronto marketing company continues to play a critical role in developing a key plank in Kraft's global marketing strategy.
Digital Cement Inc. is in the business of helping companies build long-term, customized relationships with customers.
The program it developed for Kraft Canada Inc. -- involving e-mail newsletters, branded magazines and websites -- has been expanded around the world.
"I honestly think that their approach is the model for agencies of the future . . .," Gannon Jones said recently, before the recent shakeup led to his leaving his post as director of consumer relationship marketing for Kraft Foods. "We would not be where we are today without Digital Cement."
With 100 employees, Digital Cement is one of Canada's larger marketing services companies. But it remains relatively unknown here, perhaps because most of its clients are based in the United States.
Its product offering is also unusual, clients say -- a combination of a direct marketing agency and a consulting firm.
"What they bring to the table is unique from anybody else. They've brought the best of the agency model and the management consulting model together. Nobody else has really done that," Mr. Jones said.
David Ceolin, 39, founded Digital Cement in 2000. Working as an investment banker at Toronto-Dominion Bank, Mr. Ceolin came to believe that most marketers do a terrible job of treating customers as individuals.
"TD was really stuck in that one-size-fits-all marketing space. . . ." Mr. Ceolin said. "There's an assumption that because I know someone's demographic, I know who they are."
He wrote a book based on his ideas and did some consulting, but got fed up when clients handed his recommendations over to ad agencies. Invariably, the agencies spent too much time on the creative campaign and ignored his long-term strategy ideas.
So he founded Digital Cement in his apartment. The company, which now occupies a rapidly expanding space in Toronto's trendy Liberty Village district, has seen its revenue grow at more than 70 per cent a year. Mr. Ceolin said there are no signs of that growth abating.
In addition to Kraft, major clients include FedEx Corp. and Dell Inc.
The work for Kraft has expanded from a customized weekly newsletter, based on a household's likes and allergies, to include a branded magazine, which Kraft says is the highest-circulation magazine in Canada. A similar product is No. 3 in the United States, it says.
Mr. Ceolin now welcomes working with other agencies that help develop the creative, while Digital Cement focuses on the strategy.
"Great strategy gets you a seat at the boardroom table. And if you've got a seat at the boardroom table, I think you're more competitively insulated from the risk of losing the business than someone who has great creative," Mr. Jones said.
Even rivals praise the work Digital Cement has done for its clients "I think it's great that they're making U.S. companies and the rest of the world look to Canada. . . ." said Marcus Evans, president and chief executive officer of direct marketing firm Proximity Canada.
But Mr. Ceolin, who remains the largest shareholder of the employee-owned firm, has harsh words for the rest of the marketing industry.
He said most agencies remain far too focused on campaigns, treating each client decision as a static point in time and not as part of a long-term relationship.
"Agencies lost in the 1980s to consulting companies. They lost in the 1990s to information technology companies. They are now viewed as tactical deliverers of information. And that's why the industry deserves to die."