I found this space, Lance walked in, and we said, ‘Let’s do it.’” That’s how co-founder Gary Koepke recalls the moment he and partner Lance Jensen decided to open ad agency Modernista! in a former sweatshop on the border between Boston’s Chinatown and its Financial District. The neighborhood is desolate at night—and it can get dicey—but things are changing. A park is being built on nearby acreage reclaimed by the Big Dig, and across the street, Dainty Dot Hosiery—a dilapidated ninteenth-century landmark stamped with large Deco lettering—is going condo. The neighborhood is up-and-coming, but then so is Modernista!.

Since adding ’s $300 million Cadillac account to the hummer duties it has handled since 2000, the seven-year-old “boutique” (the term doesn’t quite fit anymore) has undergone dramatic growth. The agency has doubled in size—to 155 employees—and what started on half a floor now occupies four. The agency is also handling advertising for Bono’s (RED) campaign, redesigning BusinessWeek and creating music videos for U2. “The business is doing great,” Koepke says before adding, with characteristic weariness, “We get a little worn out at times.”

Koepke, originally from Michigan, comes off like a wizened surfer—white shirt flared open, black-rimmed glasses propped carelessly on his head. He speaks lazily and leans back in his chair. Jensen, on the other hand, leans all the way forward, doodling with the intensity of a teen punk carving band logos into his Trapper Keeper. (More than one Modernistan reports having rescued his notepads—covered in yin-yang symbols and cubist faces—from the trash.) He is a big, lumbering guy with a boy’s face. He smokes and chews nicotine gum. It can seem like he’s not listening—like his mind’s on other things—but he’s enthusiastic once he gets going.

Jensen, the younger of the two, began his career as an art director at Boston’s Hill, Holliday, but was ultimately let go. (“I didn’t really know how to do it,” he admits.) He switched to copywriting at local agency Emerson Lane Fortuna, which was gobbled up by what would become Arnold Worldwide. There he helped land Volkswagen, which became a career-making account thanks to zeitgeist-capturing spots like “Sunday Afternoon” (featuring the Trio track “Da Da Da”) and “Milky Way” (which made tragic British troubadour Nick Drake famous again). It also contributed to Modernista!’s future success, since Liz Vanzura—then the ad director at —has gone on to head up advertising for current Modernista! clients hummer and Cadillac, respectively.

Koepke, meanwhile, moved to Boston as a musician and ended up becoming a designer. He took a job at Musician magazine in nearby Gloucester, which prepared him for later work on magazines like Vibe (where he was founding creative director) and Tibor Kalman’s Colors. He also worked at Wieden Kennedy before convincing Jensen to set up shop here on the edge of Chinatown.

They brought with them a lot of automotive experience—Jensen’s own and that of a parade of Arnold employees who have transferred to Modernista!—and an offbeat sensibility rooted in rock ‘n’ roll and a quasi-mystical understanding of the creative process. “Without that chemistry between Lance and Gary, there wouldn’t be any Modernista!” says creative director Will Uronis, an Arnold vet who joined the agency in its first year. When the doors opened, the shop had a simple—if somewhat inscrutable—tagline: “Reach brand enlightenment.”

Guided by this sensibility, Modernista!’s work, unlike a lot of today’s advertising, is not all about laughs. (“We don’t have that many funny clients, really,” Jensen says. “Nobody really does,” Koepke sagely notes.) Instead, the work is about beauty, or maybe taste, or what Koepke simply calls “aesthetics.” Even for a lightning-rod client like hummer, for example, the agency has created beautiful print ads and spots that borrow elements from both modern dance and independent film. “It’s not just the quality of the idea,” Koepke says. “It’s the quality of the execution. It’s the quality of the type. It’s the quality of the finish. The sound. The music.” When these elements align, it creates what Jensen calls “visual perfume,” and Modernista! specializes in just that sort of alchemy.

It appeared in the agency’s early work for , for which they cast the network as a social disease with print ads that looked like they’d been ripped from fashion magazines and stamped with ominous Helvetica warnings. It appeared in their work for Gap, where they used barely famous bands like Low and rising celebs like Will Ferrell to gather up what was left of the brand’s fading cachet.

“We’re always looking for that culturally relevant work and staying current with the hive mind,” Koepke says. “It’s intuitive, a lot of it. It’s not like there’s a book on how to do it. I just think it’s about experiencing how far you can keep your mind open on a daily basis, and paying attention.”

Modernista! is an idiosyncratic place. Each year, employees receive “talismans”—a fez, maybe, or a signet ring—to mark another year of service. There is an avid workplace interest in conspiracy theories and arcane religious beliefs. Koepke and Jensen consulted a feng-shui expert when they first moved in and their inaugural Web site appeared to be a manual about acupuncture. Koepke is a fan of the religious philosopher Alan Watts and Jensen says that creative ideas are out there; it’s the creative’s job to find them before someone else does. “Modernista! is sort of the last refuge in an industry that’s the last refuge for misfits,” says creative director Shane Hutton, who came onboard with Uronis in 2000. “When you’re here, you can feel free to express ideas that might not have been met with as warm a welcome in other agencies.”

Understandably, what gives Modernista!’s work its originality is its idiosyncratic choices. The secret society at Bohemian Grove—where powerful men gather each year in Sonoma County to run through the woods in the shadow of a giant stone owl—inspired the agency’s mysterious “We’re Watching” owl icon for MTV. (Owls, a constant touchstone, also appear on a coat-of-arms for the agency.) Its ads for (RED) merge barcodes with the tribal painting of Masai warriors, and the unlikely Iggy Pop track, “Punk Rocker,” has replaced Led Zeppelin’s cloyingly accessible “Rock and Roll” as an anthem for stodgy icon Cadillac.

Jensen pioneered the idea of breaking new music in commercials—instead of relying on dusty borrowed interest in old ones—with MTV, and Modernista!’s spots consistently have the hippest soundtracks around. “The trick with that stuff is to never let the words of the song be the copy,” he says. “That’s when you feel like you sold out the band because you’re distorting the original meaning of the song to fit your advertising agenda, as opposed to just putting it on there because it’s great.” Not that it’s easy. Koepke estimates that they burned through 400 songs before settling on The Who’s “Happy Jack” for the hummer spot “Big Race,” which tells the story of a boy and his soapbox racer. “We don’t just throw a song up and say here’s two or three,” he says. “We really work hard at it.”

“I think ads that really connect with people do so because, on some level, the person who’s watching knows that the person who made it is telling you a little bit about themselves,” Jensen says. “There’s this weird human connection when they know that it’s pretty truthful.”

The agency’s site, meanwhile, is a perpetual experiment. Now in its sixth iteration, it’s been redesigned every year or so since the agency opened. The current version features phantasmagoric illustrations by in-house designer Geoffrey Lillemon, but also reflects the Web team’s interest in making online experiences reflect users’ time and location. Depending on where you are when you log in, the site’s surreal landscape corresponds to the time of day.

Koepke and Modernista! also hatched and executed the idea for the U2 video “Window in the Skies,” which features footage from the history of music spliced together so that a cavalcade of famous artists appear to be singing along. It was a monumental undertaking that required 4 months, 2,500 man-hours and a staggering number of clearances from a diverse group of artists, including the White Stripes and The Beatles.

On the other side of the spectrum, the shop was also picked to redesign McGraw-Hill’s BusinessWeek, an unusual assignment (at least for an ad agency) that grew out of Koepke’s magazine background and the agency’s previous work creating ’s quarterly insert in:Inside Innovation. “It’s not like Tomato, but I’m interested in what groups like Tomato do, because they do all kinds of things,” Jensen says. “They do whatever their creative talents will allow, and they’re able to make a living off their aesthetic judgments.”

“I think that’s where we’re really going as an agency,” Koepke says of these non-traditional assignments. “Now that this agency is up-and-running, it has allowed us to do a U2 video, it is allowing us to do BusinessWeek, it’s allowing us to work on (RED). These ad problems are there every day, and we’re going to solve them, but it gives us some other things to do. The more we can stretch out into that, the more interesting it will be.” ca