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Will Nick Brien succeed in steering McCann off the rocks?

October 13, 2011

McCann WorldGroup is critical to the performance of Interpublic, the world’s fourth largest marketing services group; it provides about one third of its revenues.

Just recently it hasn’t been doing very well, a worrying state of affairs both for IPG shareholders and McCann’s chief executive of about 18 months, Nick Brien.

The fact is, it has not won any major new business under Brien’s stewardship. Worse, it is in deep trouble with two of its core clients, Nestlé and L’Oréal.

Last month, Nestlé expressed the depth of its displeasure by assigning all of McCann’s signature Nescafé business (nearly everything, globally) to rival Publicis Groupe. Reportedly, that’s $25m revenue down the Swanee.

Now comes news that McCann has screwed up its already troubled relationship with beauty house L’Oréal (which, by the way, is about 30% owned by Nestlé).

The Nescafé affair might – might – be written down to bad luck. Clients do move on eventually, even ones like Nestlé that have been with McCann for several decades.

The L’Oréal fiasco (for such it is) can, on the other hand, only be ascribed to McCann’s managerial incompetence. Stay with me, the story’s a bit complicated but bears retailing.

L’Oréal and its Maybelline brand are even bigger business for McCann than Nescafé: together they account for $100m a year IPG revenue, of which 80% comes out of McCann (according to AdWeek).

Historically, the relationship has been somewhat complicated by the fact US creative for Maybelline is handled by another IPG agency, Gotham, although McCann is responsible for adapting and distributing that work throughout the rest of the world.

Thinking, no doubt, that the account could be more efficiently run as a spin-off unit with its own profit and loss account, Brien and his lieutenants have spent the last year, and an enormous amount of money, creating something called Beauty Village.

Beauty Village was set up at the instigation, and with the full collaboration, of Cyril Chapuy – now global brand president of L’Oréal Paris, but formerly in charge of the Maybelline brand.

Client endorsement enough, you would have thought. But apparently not. No one had checked upstairs with the ‘C Suite’ at L’Oréal, with the result that Beauty Village has now had to be razed to the ground, despite all the hullabaloo a couple of months ago attending its launch.

Fairly or not, the buck for this disaster is going to stop with Brien. Already there is innuendo that the former media man has not got the client-handling skills it takes to run an organisation like McCann.

Whether that is actually true I’m not so sure. Media men may be direct rather than placatory by nature, but that has not stopped the likes of Tim Bell and Rick Bendel (formerly COO of Publicis Worldwide, now marketing supremo at Asda) succeeding in more senior roles.

Besides, there may be a silver lining to the cloud now settling over Brien’s head. At first sight the Nestlé and L’Oréal affairs look like unforced errors playing into the hand of Maurice Lévy, head of Publicis Groupe (core clients, both, at Publicis Worldwide). But Lévy has troubles of his own, with the Nestlé relationship at any rate.

For one thing, he has just lost Carter Murray, his key Nestlé point man, to WPP – which poached him as president-CEO of Y&R Advertising North America. Murray managed to raise Nestlé to Publicis’ premier and most profitable client.

For another, Lévy appears to have overplayed his hand by winning the £250m Ferrero European media business last month. Yes, it’s only media and, yes, a small part was already handled by PG media arm Zenith Optimedia. But now that Ferrero has upped the ante, Nestlé is feeling distinctly uncomfortable about sharing a media agency with its most deadly European rival.

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Naouri’s path to the top at Publicis leaves Pinder stranded

March 31, 2011

This week, a famous media-oriented company, family-built yet globally traded, publicly acknowledged its succession strategy. No, it’s not NewsCorp I’m talking of here (though it certainly fits the description), but Publicis Groupe.

It seems that my tentative question of over a year ago – Will Jean-Yves Naouri be the next ceo of Publicis Groupe? – has been strongly answered in the affirmative.

Little alternative interpretation can be placed on Groupe CEO Maurice Lévy’s statement to the Financial Times that Naouri “is clearly in a leading position for winning the race” to taking over as chief executive when he himself departs in “a few more years.”

As it happens, Publicis insiders have long since been placing their bets on Naouri, albeit with a few reservations about his candidature. Like any leader-in-waiting, Naouri has gradually been acquiring the instruments of power. He’s on the Groupe senior management board, he’s its chief operating officer and, thanks to his reputation as an experienced trouble-shooter, he’s been given “special powers” to shore up Publicis’ strategic weakness (relatively speaking) in China.

However, what marks out his transition from heir presumptive to heir apparent is the decision to install him as executive chairman of Publicis Worldwide. This really is entrusting the heir with the crown jewels. It means putting Naouri very much in the public eye, by letting him run a high-profile creative network.

Not any high-profile creative network, either. It is the Groupe’s flagship – quintessentially Gallic yet global – and very much Lévy’s personal fiefdom.

That is certainly one explanation for why, under first Rick Bendel and then Richard Pinder, it has effectively been run by chief operating officers rather than a formal CEO. In effect, it didn’t need one, since Lévy kept a watchful but fatherly eye on its activities.

Publicis has, of course, been here before. In 2006, Lévy poached Olivier Fleurot, a former FT Group chief executive, as executive chairman of the creative network, at the same time that Pinder was brought in as COO. Then, as now, the honorific appointment gave rise to speculation that Lévy was grooming his successor. However, by Spring 2009 Fleurot had moved off the boil (or at least off the board): to head the holding company’s PR operations, leaving Pinder soldiering on alone at Publicis Worldwide – with effective responsibility for the network, but not full empowerment.

This being so, it is understandable why Pinder should choose to quit now. Being British in a top French company is not quite the barrier to top-flight promotion it might appear at first sight – as David Jones’ recent elevation at Havas Groupe demonstrates. Even so, the odds on Pinder being further promoted – despite his successful 5-year tenure at Publicis Worldwide – seemed remote. In effect, the appointment of Naouri was the coup de grâce to his career advancement. It’s a loss for Publicis, too, because the relentlessly itinerant Pinder gave the network a genuinely cosmopolitan aura.

As far as I can make out, the parting has been amicable enough: Lévy appears to have been keen for Pinder to stay on; and was financially generous when it became apparent he would not. Pinder seems to have a clear idea of what he wants to do next, though what that is I do not know.

Anyway, back to Naouri. Is there any reason to suppose that he may suffer the same fate as Fleurot? Not really. For one thing, time is pressing in a way it was not back in 2006. Lévy is now in “extra time” as group CEO, and shareholders will want a definitive solution sooner rather than later. True, Naouri still has to be anointed by the most important shareholder of them all, Elisabeth Badinter (daughter of Publicis’ founder and the single-biggest stakeholder). But that’s beginning to seem more and more a formality as the alternatives ebb away. The job is now Naouri’s to lose, not someone else’s to win.

The more interesting question is: what will happen to Lévy himself when Naouri is formally given the top job. Will he really retire?

As a candidate, Naouri certainly ticks many boxes. He comes from the right French social and educational background. His relationship with Dominique Strauss-Kahn could be invaluable, should the current managing director of the IMF ever run for president (polls indicate he would beat Nicolas Sarkozy). But charismatic he is not.

The possibility therefore exists that Lévy might be asked to stay on in some capacity. Perhaps as lifetime president.


Asda Owen appointment rings the changes

June 15, 2010

More musical chairs in the grocery sector. Although at a lower level than those explored in my Marketing Week column this week, they are connected to the same phenomenon: the need for change.

Mark Sinnock, Asda’s marketing director, has mysteriously quit after only 15 months in the job and been replaced by director of marketing strategy Jon Owen.

To outward appearances, Sinnock was a fish out of water in the hermetic world of supermarket senior management. Rather than working up from the ranks, he was imported directly from Asda’s then advertising agency, Fallon, where he was chief strategy officer. On closer inspection, however, there were some uncanny echoes in his career move to that made by his mentor and boss, Rick Bendel, who currently rejoices in the title of chief marketing director.

Bendel: Like Sinnock, a former adman

For years, Bendel himself had been an adman – one of whose principal concerns was nurturing and safeguarding the invaluable Asda account (it spends £70m a year in today’s terms). When, after reaching the top of the greasy pole at Publicis Worldwide, his luck ran out in the agency world, he was able to make an effortless transition to the client side – as marketing director of Asda. By a further curious irony, Bendel, having left Publicis, promptly fired his former agency and transfered the Asda account to Fallon; in a similar fashion Fallon lost the business to its sister SSF agency, Saatchi & Saatchi, when Sinnock himself went client side.

The Sinnock hiring was part of an elaborate empire-building exercise in the marketing department whose welter of titles has left outsiders bewildered at to what exactly everyone does. Sinnock reported directly to an elevated Bendel, and was responsible for “developing the marketing and customer strategy across the breadth of Asda’s marketing function,” whatever that means precisely. Alongside him was Katherine Paterson, Asda’s marketing director for communications. Then, reporting to Paterson, was head of brand marketing – and former McCain marketing director – Simon Eyles.

One thing transparently clear from the title verbiage is that Sinnock was brought in to simplify Asda’s complex marketing problems. It’s equally clear that the once-favourite has failed in his task, or perhaps been scapegoated for a collective failure. The new boy, Owen, is of more traditional stock, having joined Asda as head of research in 2005. He will combine responsibility for strategy, advertising, insight and pricing.

It’s hard to avoid linking his appointment with chief executive Andy Bond’s move upstairs at Asda and the arrival of a new ceo, Andy Clarke – Asda’s former chief operating officer. In May Asda revealed a slump in its like-for-like figures, which were down 0.3% in the first three months of the year. It marks the first time they have gone into reverse since 2006. Asda is desperate to shed its image as a recession-driven, promotion-mad price-slasher and has returned to its traditional strategy of everyday low pricing. It is claimed that Owen masterminded the recent Asda Price Guarantee initiative. Certainly his appointment underlines a shift towards greater simplicity and a reassertion of the tried and tested in Asda’s marketing strategy.


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