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Max, Dan, Jerry – 2012’s out-performers

December 14, 2012

League tables of achievement are as commonplace as turkeys right now. Why burden you with another one? Well, I’ve been asked to – by the good folk at More About Advertising. So:

Ad of the Year. Yes, I liked BBH’s “The 3 Little Pigs” and Creative Artist Agency’s Cannes Chipotle winner. Also, Del Campo Nazca Saatchi & Saatchi’s work for – of all improbable B2C clients – air-conditioning specialist BGH. Of which this, directed by Juan Cabral, is the latest instance:

As MAA’s Stephen Foster puts it – “bleakly comic”.

My favourite, though, was “Follow the Frog”, a quirky satire of the desk-bound yuppie eco-warrior fantasising about making the World A Better Place. Writer, director, copywriter, art director is Max Joseph – clearly a bit of an Orson Welles in the making. The commercial was produced by Wander Films, a creative boutique in Los Angeles. The moral? You don’t need to go to the ends of the earth to save the rainforest. Just Follow the Frog by buying kitemark-certified Rainforest Alliance products. They’ll do all the ethical heavy-lifting for you: sustain the forests, uphold socially equitable farming methods, and guarantee that what you buy is economically viable:

It’s long – but isn’t nearly everything these days? The measure of the made-for-internet film is not its length, but how well it sustains our interest. On this criterion Follow the Frog succeeds very well. It’s got a good tale to tell, is directed with panache and enlivened by bold use of graphics. Oh, and it uses gentle humour to camouflage the piety of its evangelical message. Yes “Siri”, it get’s my vote.

Agency of the Year. I won’t beat about the bush: it’s got to be Wieden & Kennedy. International networks frequently produce isolated instances of brilliance (Del Campo being an example within the Saatchi organisation). Exceptional work, simultaneously executed on a number of fronts, is another matter. To take an investment analogy, W&K is a momentum stock outperforming in all its main markets. Whether that’s Clint fronting for Chrysler at the Super Bowl:

… London winning the £110m Tesco account – but also producing some of the most interesting creative work since “Grrr”:

Or Amsterdam’s slick spoof for the latest James Bond film, which neatly segues into its current Heineken campaign:

Person of the Year. Tempting to mention the name of Joel Ewanick, isn’t it? No one can be said to have made a bigger splash in the world of marketing over the past year. Arguably, however, the now-dismissed chief marketing officer of General Motors made headlines for all the wrong reasons. A change agent he certainly was, but were any of his changes for the good? And what sort of permanence will they have? We hacks miss him, but I suspect the wider marketing community will not.

Jerry BuhlmannInstead of anti-hero, therefore, I’ve plumped for a gritty go-getter: marketing services’ answer to Daniel Craig. Like Craig, he certainly wouldn’t be everyone’s first choice as the archetypal smooth operator. But his coolness under fire cannot be doubted. Step forward Jerry Buhlmann, chief executive of Aegis Group plc. If there is one thing archetypal about Jerry, it’s that he’s a self-made media man. He started off in the “five to one” slot, in other words the lowest of the low in the full-service agency hierarchy, at Young & Rubicam in 1980. Nine years later, he was setting up his his own media-buying outfit BBJ – along with ultimately less successful Nick Brien and the downright obscure Colin Jelfs. BBJ – nowadays Vizeum – though successful (it handled for example the BMW account) was originally a “second-string” shop for conflicted WCRS media. Buhlmann’s career really took off when WCRS’s Peter Scott had the inspired idea of acquiring Carat – Europe’s largest media buyer – and floating off the combined operation as a separate stock market entity, rechristened Aegis. Buhlmann and his company were soon swallowed up by the independent media specialist, which offered him much wider career opportunities.

But was he a man capable of capitalising on them? While no one has ever doubted Buhlmann’s single-minded ambition to succeed, a lot have wondered whether he had the competence to do so. Yes, he had a mind like a calculator and razor-sharp commercial acumen, but where, oh where, were those human skills no less essential for making it to the top of the corporate pile? There was much mirth in the senior reaches of the media industry when Buhlmann got his first big break as head of Aegis Media EMEA in 2003. “It’s like William Hague trying to emulate Margaret Thatcher” was a typical response to his promotion. Then, as later, Buhlmann’s critics completely underestimated his ability to learn on the job. When he became group chief executive in 2010, the reception was scarcely less friendly. The master of ‘focus’ and ‘detail’ was incapable of taking the broader view vital to successfully running a publicly-quoted company, it was said. And then there was Jerry’s far-from-diplomatic demeanour: how long before he rubbed the City up the wrong way and had to be dispensed with?

It wasn’t as if Aegis was an easy company to run, either. As a (near) pure-bred media specialist, it was susceptible to squalls in the media every time the inevitable financial scandal broke. Inevitable, because media buying and peculation are bedfellows and peculation distorts financial performance – meaning in Aegis’ case it had to resort to highly public mea culpas every now and then. Other major media outfits, by contrast, have been able to rely on defence in depth from the much bigger marketing services organisations to which they belong.

Not only that, Aegis’s card was marked as a public company. For years, it laboured under the strain of being a takeover or break-up target. The strain became nightmarish when Vincent Bolloré, the shareholder from hell, took a strategic stake in Aegis and began engineering a series of boardroom coups.

Some of the credit for Aegis’ eventual soft-landing – a 50%-premium, £3.2bn cash deal with Dentsu, sealed last June  – must go to Aegis chairman John Napier. But that still leaves a lot owing to Buhlmann himself. Not only did he keep all the plates spinning in difficult circumstances, he also demonstrated a strategic clarity which eluded his predecessors. He ruthlessly pruned the company of its lower-margin research operation (by disposing of Synovate to Ipsos), but at the same time bolstered its pure-play media-buying profile with the geographical add-on of Mitchell Communications.

Not a bad result, all in all, for the man once dubbed the king of the second-string.

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Mindshare beats Carat to €150m SFR media-buying and planning account

August 1, 2012

Word reaches me that Aegis’ Carat has just lost one of France’s biggest media accounts to WPP’s Mindshare. SFR, the mobile phone carrier owned by Vivendi, has a media budget of about €150m (£120m). Overall, it is one of France’s biggest advertisers, ahead of Orange, but behind Renault, with a total budget of about €300m.

For WPP, it’s second time lucky. In 2009 a joint-ticket of Mediaedge-CIA and Mediacom got into the final frame of a review, but was seen off by Carat, which has now been the incumbent agency for about 15 years. OMD and Zenith-Optimedia also participated in the 2009 pitch. It is not known whether other agencies were involved in the current one.

SFR, which offers fixed line, mobile and broadband services, spends the biggest part of  its advertising budget on television – about €92m last year. Next comes outdoor, with a spend of €65m, then digital, with €62m.

Separately, Carat will have been shaken by the news that Joel Ewanick, the man responsible for placing General Motors’ $3bn global media account in their hands, has been abruptly fired by his company.

Earlier last week, John Gaffney, who led Carat’s North American General Motors account out of Detroit, quit the media agency. The circumstances surrounding Gaffney’s departure are unclear. Some sources maintain his departure was related to client dissatisfaction with Carat’s performance. Others more directly connected to the situation insist Gaffney’s exit was not directly related to performance on the GM assignment.


Agencies pick over Ewanick’s GM legacy

July 30, 2012

“He failed to meet the expectations that the company has for its employees,” said General Motors spokesman Greg Martin cryptically. That looks like being GM global marketing supremo Joel Ewanick’s epitaph. The marketing whirligig quit abruptly last weekend, after two years at the steering wheel of one of the world’s biggest car companies.

But just what did Martin mean by failed expectations? It appears that Ewanick fell down badly on the small print in the 5-year sponsorship deal he signed with Manchester United. Details remain sketchy, although they will undoubtedly emerge over time. Some financial liability is likely involved should GM fail to deliver on its side of the bargain; this seems to be what Ewanick ‘forgot’ to disclose to his superiors.

GM may be glad to see the back of him, but we hacks will miss Ewanick – with his uncanny ability to manufacture a headline. Here is the man who said ‘No’ to extortionate prime-time Super Bowl advertising; and put two-fingers up to Facebook – commercially speaking – just before it foundered in a very rocky public flotation. The Manchester United sponsorship was to be his masterly counter-coup: Ewanick bringing in the vibrant Old World (China and emerging markets included) to redress a marketing overspend in the tired old New.

Alas, attention to detail seems foreign to Ewanick’s nature. Now we shall never really know whether he was a marketing visionary with a bold grasp of the Big Picture, or simply a publicity-hungry megalomaniac revelling in world-renown.

What matters from here on in is the unpicking of Ewanick’s legacy. Hundreds of millions of dollars of revenue are at stake for the agencies that signed up to the Ewanick dream. Doubtless their lawyers are already assessing the strength of the contracts they co-signed with him. What now for Carat’s tenure of the $3bn global media account? And for Commonwealth, the complex advertising vehicle set up so that Goodby Silverstein and McCann Erickson could jointly service most of the global Chevy creative account? The holding companies of all three agencies – Aegis Group, Omnicom and Interpublic – have already made substantial investments in staffing up in and around Detroit to service the newly streamlined accounts.

Advertising relationships in the auto-industry have traditionally been very personality-driven. Despite a thick coating of metrics-speak in all their public utterances, this has been transcendentally true of Ewanick and his advertising coterie.

Goodby looks particularly vulnerable, given the close personal relationship between Ewanick and Goodby founder Jeff Goodby – who shared the stage at this year’s Cannes International Festival of Creativity.

All eyes will now be on Ewanick’s (at least temporary) successor, Alan Batey, head of US sales and service.

Little is known of him other than that he was once a car mechanic. But of one thing you can be certain. Agencies, on and off the GM roster, will be doing their damnedest to find out more. Just in case.

UPDATE 31/7/12: The problem with the Manchester United shirt sponsorship deal is that Ewanick paid too much, it has emerged. He committed to a 7-year deal at £25m ($39m) a year without disclosing how “full” the terms were to GM’s board. $300m represents a premium of 25% to what the current sponsor, AON, is paying – and is a lot more than Ewanick seems to have implied to his colleagues during negotiation.


A successor to Maurice Lévy as head of Publicis Groupe? Yes, but no, but maybe

July 24, 2012

These days, we’ve come to see Maurice Lévy, chairman and chief executive of Publicis Groupe, as something of an oracle. Every time the 70-year-old eminence grise makes one of his ceremonial public appearances – ostensibly to observe the religious rites of the financial year – we strain our ears for words of greater meaning, expertly hidden between the monotonous reporting lines.

This year’s halfway performance was no disappointment. In themselves, the figures were not terribly exciting. Organic growth of 2.8% and a 19% uplift in income were a perfectly respectable outcome, given that the Eurozone economy has developed blackspot and Publicis had lost the General Motors account. Clearly the BRICs and MISSATs (as we must now refer to Mexico, Indonesia, Singapore, South Africa and Turkey) must be doing rather well to make up the averages. And – hidden gem – Britain seems to be uncharacteristically up among them – for now at any rate – since it posted a 4.1% increase in growth.

But all this numerical incantation was historical stuff, and not what we actually wanted to hear.

What was M. Lévy’s outlook for the global advertising economy? The downward trend between the first and second quarters would halt. Much higher growth could be expected in the third quarter, starting right now. Phew!

And what of Dentsu’s acquisition of Aegis Group, what did he think of that? “The price is extremely full,” he opined in true oracular fashion. “It’s a nice acquisition for Dentsu.” But not for anyone else, we were led to believe. Not at least for anyone with a head for figures. And certainly not for Publicis Groupe, which had done something infinitely more sensible with a full buyout of BBH.

And the Publicis Groupe succession (which is all we really wanted to hear about) – any progress on that? Here M. Lévy outdid himself in Delphic obscurity and double meaning. Yes, a successor to himself would emerge. In September. Or was that just the beginning of the process? It rather looked like it: “In September the board will start the process.” Hold on a minute, hadn’t this “process” been going on for several years now? Why did it need to “begin” in September?

But, a successor would be found, wouldn’t he? Think of those poor clients and investors waiting anxiously for reassurance.

Yes, M. Lévy had his preferred private candidate, but he wasn’t going to disclose their identity to anyone else. That was a matter for the board.

So, we’ll take that as full confidence in Jean-Yves Naouri, PG’s chief operating officer  and Publicis Worldwide CEO whose name Lévy had let slip during an earlier ritual occasion? Well, possibly. Unless that successor were to be Arthur Sadoun, managing director of Publicis Worldwide. Or maybe Simon Badinter, son of its most important shareholder, Elisabeth Badinter – without whose approval no Lévy successor can be anointed.

But we could be clear on one thing, couldn’t we – M. Lévy himself would be vacating his See? Ah! Well, yes and no: “The first and most important thing is the depth and breadth of the teams at Publicis is such that my presence is almost non-important. I think it’s very important that there’s a succession plan and I’m doing everything I can, with a fantastic team, to make sure that no one who entrusts us with their confidence will be disappointed – our clients, our people, our investors,” he said with studied contradiction. Someone “almost non-important” needs a successor, eh?

Let’s get this straight then. A candidate does exist. It’s Jean-Yves Naouri, who has been working like a Stakhanovite to prove his mettle. But doubts remain about his suitability. Is La Badinter any more enthusiastic about “the approved candidate” than when his name first emerged over two years ago? Probably not, but she’s going to have to face up to reality soon, because there’s no obvious alternative to Naouri in the wings. Unless, of course, we’ve been barking up the wrong tree here. Perhaps there won’t be a single successor. Maybe Naouri will be installed with a junior partner at his side – conceivably the more charismatic Sadoun. And just to be absolutely certain the glue sticks, Maurice Lévy won’t be leaving any time soon. He won’t be président directeur-général any longer, of course. Just life president. After all, the one thing he did unambiguously tell us was: “It’s my life and I don’t intend to simply leave the company. Whatever happens to me I will always support Publicis and help Publicis as long as Publicis will need me; in whatever capacity Publicis will need me. And that is clear.”

Yes, for once, it is.


£3bn Aegis deal will test Dentsu’s mettle

July 13, 2012

Cynics might say that £3.2bn – cash – is an awful lot to pay for digital competence and a superior market rating. And they have a point. Would Dentsu ever have planned such an audacious and costly coup as the acquisition of Aegis Group had the Japanese advertising group earlier succeeded in its seemingly knock-out offers for Razorfish and, later, AKQA? It’s subjunctive history: we’ll never know.

Aegis chief executive Jerry Buhlmann and Dentsu president Tadashi Ishii: Firm friends?

The cynics are, in any case, substantially unfair. There’s much more to the Aegis acquisition than digital. This is arguably the transformative deal of the decade. It’s as if there has been a tectonic plate shift in marketing services, revealing a series of minor preceding tremors as clearly apparent elements in a wider pattern.

These minor tremors include the foundation of a much stronger, and more independent, operating unit in the US – Dentsu North America – under the direction of Tim Andree; Andree’s earlier acquisition of some of America’s sharpest shops, McGarryBowen, Attik, and 360i; the harnessing of McGarryBowen to Dentsu’s embryonic European network, led by former WPP executive Jim Kelly; and, not least, Dentsu’ decision to pull out of its unsuccessful strategic alliance with Publicis Groupe, cashing £535m in the process.

Andree, now gone global as senior vice-president at Dentsu and no doubt a strategic architect of the acquisition, has admitted that the £535m was “helpful in this deal” – coded language referring to the cash pile making it possible at this time. But something of the sort has needed to happen for a long time if Dentsu were not to be stranded in its idiosyncratic role as a one-country wonder, with 80% of global earnings still accounted for by overwhelming dominance in the Japanese market.

There are lessons in failure, and the Japanese management of Dentsu finally seem to have learned them. Neither strategic alliances, meaning stakes of about 20% in rival but complementary marketing services companies, nor the occasional one-off acquisition, such as Collett Dickenson Pearce all those years ago, suffice  for players in a global market. They needed to delegate more, and yet be more masterful in their acquisition strategy.

The delegation came in the realisation that people like Andree, John McGarry and Kelly would know more about how Western advertising culture actually functioned than Tokyo Central would ever know.

The more masterful acquisition strategy came from the realisation that opportunities for global expansion were rapidly narrowing, and if they wanted a suitable counterweight elsewhere in the world, they would have to put aside an institutional aversion to big takeovers and get the cheque-book out.

That’s why £3.2bn to buy the Aegis Group – 18 times prospective earnings compared with a market average of about 13 – is not too much to pay for this deal. It gives Dentsu indispensable weight as a global player: at $7bn revenues combined, close competition with the Interpublic Group as the number 5 player. As a media/digital operator, it moves into the third slot, behind GroupM (WPP) and Vivaki Media (PG). And geographically, it reduces its dependence on Japan to 60%.

Over at Aegis, it’s difficult to guess whose smile is broader: that of Vincent Bolloré, 26% shareholder; Harold Mitchell, who doubles his invested capital from the sale of his business two years ago with a £112m takeaway; or Aegis chairman John Napier. Napier has had to perform a very difficult tightrope trick in the City with a monkey on his back. The monkey is Bolloré.

On the one hand, Aegis has performed extremely well in recent years, with organic growth rates defying all its bigger rivals. A cleaning-up operation, which brought Mitchell’s Australian media buying services in and off-loaded the under-performing Synovate market research business on Ipsos, improved them still further.

On the other, there was always an air of impermanence about a company as small and narrowly defined as Aegis being on the public markets. Chief executive Jerry Buhlmann knew it, Mitchell – judging from his share investment strategy –  knew it, Napier knew it and – most importantly – Vincent Bolloré knew it. Which is why he built up a stake in the first place. From the angle of Aegis’ corporate independence it is difficult to know which was worse: Bolloré Mark 1, the corporate raider stealthily engineering a boardroom takeover with a view to break-up; or Bolloré Mark 2, the disillusioned ‘strategic investor’ seeking to offload his game-changing stake at the first reasonable opportunity. Each was destabilising; neither the stuff of a good corporate narrative to wow other investors. Bolloré is now laughing all the way to his bank – £725m in pocket, representing a 50% premium on his investment. Quite what this means for the future of Havas, trailing with only $2.3bn global revenues, is of course an interesting  – but quite separate – question.

The nature of the Aegis deal – cash, and a 50% premium to the share price – makes it exceedingly unlikely that Dentsu will face any challengers for its prize. What matters now is whether it will make the deal work. The enlarged Dentsu can boast that 37% of its revenues are derived from the cutting edge, digital – a greater share than any other global marketing services group. Buhlmann has agreed to stay on until at least the end of next year, which should help the glue to set. But what then? Aegis, at nearly 40% the size of its new parent company, is by a wide margin the biggest acquisition that Dentsu is ever likely to make. That’s quite a cultural challenge.


The bottom line of Carat’s $3bn General Motors win – no profit for 2 years

February 19, 2012

Say what you like about Joel Ewanick, General Motors’ global marketing supremo, he knows how to drive a financial deal.

The terms on which he vested Carat with the consolidated $3bn global media planning and buying account (minus BRIC countries Brazil, India and China) are now beginning to emerge.

And do they squeak. If what I hear is right, Carat – a subsidiary of Aegis Group – will not receive any profit on the account, which it recently wrested from Publicis Groupe’s Starcom operation, for a full 2 years. GM has agreed to pay no more than labour costs during that period. What’s more, it’s not going to part with a dime before Carat North America, which is handling the new business, is fully staffed up. Formally, Carat takes on that business (it already handles the $600m European account) in June this year.

Not surprisingly, making the arithmetic add up is causing Carat a few headaches. And not just Carat. Starcom has between 230-250 full-time staff running the North American business (the bulk, in global terms). Carat apparently expects to carry out the same tasks with a full-time complement of 175, or about three-quarters of the Starcom team. Starcom’s Detroit media folk, many of whom will have been hoping for continuity of employment through taking the Carat shilling, must now feel as if they are being poured from a quart- into a pint-pot.

So, when we hear Aegis Media Americas CEO Nigel Morris saying of the Carat win: “This is a defining moment for our business and the market. We have designed our organization for convergence and globalization. We have a clearly differentiated operating model that is focused on reinventing the way we work with our clients and their brands. From the outset it was evident that the GM team was looking for a transformative approach with innovation at the core,”  – we now know exactly what he means.

Necessity is, after all, the mother of invention.

For sure, the $3bn account is a totemic win for Aegis – going well beyond its immediate financial calculus; every prospective client likes a winner. But Carat is going to be pedalling hard all the way up the hill to make this deal work.


After all that, Joel Ewanick awards $3bn GM global media account to – Carat

January 24, 2012

It seems the keeper of the world’s third largest advertising budget is a bit of a tease. Only the other day Joel Ewanick, General Motors global chief marketing officer, was telling us that, six months into the review, he simply couldn’t make up his mind about where to place GM’s $4.26bn advertising budget. Agencies on tenterhooks. Could there be a last minute reprieve for them?

Aegis Group chief executive Jerry Buhlmann: $3bn Carat win should bring a smile to his face

No there could not. Actually, Ewanick had long since decided to give the largest chunk under review – the $3bn global media planning and buying business (bar India and China) – to Aegis-owned Carat. You read it here first, as long ago as early December.

If there was last-minute anguish over the decision, it more likely related to brinksmanship over Carat’s fee and the administrative nightmare of reducing a media roster of 40 down to a single agency.

That said, another part of the review may prove more of a poser for him. Ewanick has yet to pronounce on who will win creative duties for the mega-billion dollar Chevrolet account (it’s GM’s biggest brand, accounting for over half of vehicle sales). Omnicom-owned Goodby Silverstein & Partners looked safe with the bulk of the account since it was hired on Ewanick’s personal say-so soon after his arrival at GM. But there is talk that IPG agency McCann-Erickson – which already handles Chevy in India, China and Latin America – is destined to become the first Chevrolet global agency of record (ie, the senior partner).

We can only hope that, for the sake of embattled McCann Worldgroup chief Nick Brien, this rumour turns out to be true.

Because there is little solace to be found elsewhere. Universal McCann’s Latin American media business – sizeable and, more importantly, booming – will now be moving to Carat.

It could be worse though, Nick. Biggest casualty by far of the media consolidation (and indeed of the general review) is Publicis Groupe. PG’s media unit Starcom MediaVest has held the dominant US slice of the business since spring 2005 (back then, way before Lehman Bros and Chapter 11, it was worth $3.5bn a year).

Until now, PG has had a very strong year, mostly at WPP’s expense. Starcom managed to wrest the $600m Novartis account from MEC and its Digitas unit recently won the $1bn Sprint telecoms business. But the crushing GM media loss comes on top of other, collateral, damage. Big Fuel, the social media agency which Publicis seems to have acquired partly at Ewanick’s behest (it certainly came highly recommended) has overnight been reduced to a shell of its former self. By the self-same Ewanick’s unhelpful decision to move the GM account – about three-quarters of its income – elsewhere. Gives a new meaning to “Le Défi Americain”, doesn’t it?


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