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Nick Brien heads for McCann exit. But who would wish to step into his shoes?

March 16, 2012

Word reaches me that Nick Brien, chief executive officer of Interpublic Group’s troubled leviathan McCann Worldgroup, will be stepping down very shortly. Possibly within a few weeks.

The size of Brien’s no doubt handsome severance package is likely to remain a mystery, the reason for his departure less so.

McCann has, in recent years, been a slow-motion accident gradually picking up speed. The traditional banker of Interpublic, accounting for 30% of group revenue (according to the Wall Street Journal), it was once a licence to print money on account of 5 foundation global clients. These were: Unilever, Exxon Mobil, Nestlé, L’Oréal and General Motors. More recently it has come to rely upon Microsoft as well. Here’s the recent tally:

Unilever (mostly Walls) has long gone, and the souring of the relationship can hardly be blamed upon Brien (even though the last bit of media did leave in 2011). Less excusably, his 2-year tenure has coincided with serious difficulties afflicting the other five.

Nestlé? McCann lost the crown-jewels global Nescafé creative account (worth about $25m income annually) to Publicis Groupe. McCann had handled the vast majority of the business for several decades.

Exxon? Lost the $200m creative account (which went back to 1912) to BBDO after a year-long review completed late last year. Universal McCann, MRM and Momentum have, however, managed to cling on to media.

General Motors? McCann lost out in the recent contest for GM’s $3bn global media business (of which Universal McCann had a substantial chunk), and is still on tenterhooks over whether it has won, lost or drawn in a creative review of the worldwide Chevrolet business, which accounts for the bulk of GM adspend.

Did I mention the Microsoft débâcle? About a year ago, UM and Mediabrands lost more than half Microsoft’s global media business after a review which saw the $615m US business pass to Publicis’ Starcom MediaVest.

And so to L’Oréal – perhaps the single most important McCann relationship, accounting (I’m told) for about 20% of its operating profit. Brien made a fundamental wrong turn last year when he sought to shoehorn Maybelline into a standalone shop, Beauty Village, which was also to house L’Oréal’s main brands. Characteristically (for a former media man), he had spotted the cost benefits of ruthlessly streamlining the business. Equally characteristically, his critics would say, he showed almost zero client empathy in setting about the task. When L’Oréal’s ‘C Suite’ finally tumbled to what he was doing, they were apoplectic and nixed the whole project.

Worse, it would appear, is on the way for McCann. L’Oréal now seems poised to take a considerable amount of its creative work in house. From what I hear, it will drop one of its two global agencies. And given that Publicis is the Paris-based home team, currently rejoices in a better brand name and – in Digitas – a superior digital operation, who do you think that unlucky agency might be? Driving L’Oréal’s thinking, sources say, are potential cost savings of $50m a year.

An indication of the way the wind is blowing may be detected in the recent defection of McCann’s L’Oréal worldwide account director Aude Gandon, who joined Publicis Worldwide last month. Gandon was a Brien protegé. She was formerly managing director of Leo Burnett’s beauty, fashion and luxury division, Atelier-lb, and was brought into McCann shortly after Brien got the top job.

Hers is not the only departure. Note that Garry Neel, the GM brand leader at McCann is quitting (although he will stay on as a consultant). As is Matt Freeman, who was hired as chief global chief innovation officer and vice-chairman less than a year ago. Only last week, Cathy Saidiner, president of McCann LA since 2008 – and a key Nestlé contact – also quit, according to an AdWeek report which also carried a denial that Brien is about to step down.

Against all these losses, McCann under Brien has yet to nail a significant new business win. Sense a pattern, anyone?

Equally interesting, while on the subject of Brien’s imminent departure, is who might replace him. Who, now that Brett Gosper has quit, has sufficient stature within McCann? And if an external candidate, which first-rate suits would be prepared to risk their reputation in taking on such a vertiginous challenge? The ideal candidate might well be Andrew Robertson, BBDO Worldwide CEO (who has not so far landed that top Omnicom job he was rumoured to be angling for). But why would he want to go to McCann? Surely not for the money.

UPDATE 19/3/12: Another top level casualty: this time Tom Gruhler, global managing partner at McCann Worldgroup, who is heading off to Microsoft as vice-president of phone marketing. Gruhler, who joined McCann in 2003, oversaw a specialist technology and telecoms unit the agency was developing. Previously, he was point man on the Verizon account, but much of that defected to agency-of-the-moment McGarryBowen in 2010. There’s now an inescapable whiff of the Führer Bunker, April 1945, in the air.

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Why Unilever’s Chrysalis was no butterfly

July 5, 2010

“Odd” was how one highly placed Unilever source described the food, toiletries and detergent giant’s decision to scrap its innovative Chrysalis unit after only two years. Odd indeed: its disappearance is as enigmatic as its existence in the first place.

Chrysalis was a kind of wholly-owned incubator, in which Unilever stored some of its most treasured “local jewels”, such as Marmite, Pot Noodles, Peperami, Slim-Fast and Bovril. Altogether, there were 14 of them, stretching across 3 markets: Germany, France and Britain. These brands had one thing in common. Their quirky, national character possessed almost no transborder appeal. On the other hand, put together, they added up to a £500m business – no small change.

Unilever never made the rationale of Chrysalis entirely clear, leaving journalists and City analysts to fill the vacuum with speculation. Unilever’s one categorical utterance on the subject was that the brands were not for sale. Which the City boys (such as Citigroup) took to mean the exact opposite.

Look at the company’s strategy, One Unilever, they said. It’s all about multinational power brands such as Axe/Lynx, Persil, Dove and Wall’s. What possible role could tiddly, if charismatic, brands like Marmite have in this? By way of justification, they pointed to various strategic disposals the company had been making around the world: Boursin in France, a Brazilian margarine company here and an American detergent company there. Second, they pointed to an inherent contradiction in running these highly localised brands out of a central organisation based in Rotterdam; meaning Chrysalis must be a short-term expedient. And third – the clincher – Unilever had deliberately segregated its minor brands into two categories. There were those – like Colman’s mustard and PG Tips – that remained in the main Unilever fold and then the rest – the black sheep so to speak – which had been hived off into Chrysalis.

So much for that theory: all the black sheep have now been herded back into the main fold  – under the name of Incs (Incorporated Businesses) – leading Investec analyst Martin Deboo (for one) to conclude ruefully that rumours of a sell-off were overcooked.

I’m not so sure. The obsession with a brands sale seems to have arisen from a partial misunderstanding of Chrysalis’ purpose in the first place. By the same token, its dissolution cannot be regarded as a guarantee the brands will remain in the long-term ownership of Unilever.

First, the creation and purpose of Chrysalis. Admittedly, in the past, these brands might have ended up in the hands of private equity companies. But by 2008, the date of Chrysalis’ origin, such funding was already becoming very tight. At one level, the unit was clearly intended to keep them financially afloat. It was equally apparent, however, that – put in the hands of semi-detached entrepreneurial managers – Chrysalis would serve as a nifty brand laboratory whose lessons could be imported into mainstream Unilever culture.

The man chosen to lead this alternative operating model was James Hill, who had a considerable track record behind him as first chairman and md of Lever UK, the Unilever detergent arm, and subsequently senior vice-president marketing operations Unilever Europe.

Whether under Hill’s leadership these 14 brands actually made significantly more money for Unilever I have no idea (but some doubts). More evidently, his brands did succeed in making a lot of positive media noise for big, boring Unilever and embarked on some interesting experiments.

Marmite is a good case in point. During Hill’s stewardship, the brand name has finally passed into the English language as a metaphor of sharply contrasted appeal. Marmite led the way (well, co-led it with HMV) in pioneering temporary “pop-shops”. These exploited high-profile retail premises left fallow by the recession to merchandise 100 Marmite-branded products, including food, clothes, art and even Christmas boxes.

I seem to remember Marmite also made skilful use of its brand personality to keep itself front of mind during the late, long-drawn-out, election with a “Love Party versus “Hate Party” campaign featured on a specially devised website, http://www.marmitenewsnetwork.com.

The Marmite campaign soon amassed some valuable political capital when Nick Griffin, leader of the BNP, decided to do some passing off of the “Hate Party” – complete with hijacked Marmite logo – in his own political broadcast. Threat of legal action by Unilever not only forced a humiliating climbdown by Griffin, but caused him to lose his irreplaceable webmeister in the media furore that followed.

Enough of Marmite. Let’s also consider Peperami. The sado-masochistic salami brand created a bit of a sensation last year when its group marketing manager, Noam Buchalter, fired Lowe – its agency of 16 years – and solicited members of the public to come up with ideas for the next ad campaign. Crowdsourcing, as it is called, is increasingly trendy these days – a kind of marketing analogue of social media. Walkers used it to some effect recently when coming up with a new crisp flavour. What’s far less usual is to fire one’s ad agency in the process. This heinous act sparked an explosive debate in creative agency circles, the gist of it being that Unilever is a cheapskate, seeking to circumvent agency fees with inexpensive ideas sourced through the internet which achieve, at best, tepid success. We have yet to judge, in Peperami’s case. More importantly, however, the Peperami crowdsourcing episode was a first for Unilever which succeeded in capturing the attention of new chief marketing officer Keith Weed. One of Weed’s first initiatives on taking over from Simon Clift earlier this year was to approve a crowdsourcing drive for 13 of Unilever’s biggest brands, including Wall’s, Lynx and Dove involving the same $10,000 “bounty” for the lucky winner.

Weed has subsequently felt the need to back-pedal, and reassure agencies, on the issue of crowdsourcing. In an interesting and wide-ranging debate with WPP ceo Sir Martin Sorrell at Cannes (where Unilever was declared Advertiser of the Year) he had this to say:

“In general, I’m not going to use crowdsourcing as a substitute, with the exception of Peperami.” Consumer-generated ideas, he added, are merely a way of allowing Unilever to “pilot and test things”.

Which brings me to why Chrysalis was eventually ditched. At the beginning of this year, James Hill moved to another Unilever job, that of chairman of Italy. Buchalter has also quit, to become a consultant. It would be easy to surmise ‘writing on the wall’ here. I doubt that is the case, however. There is an exactness about Hill’s two-year term that suggests this was a valued Unilever “lifer” taking up a new turn of duty. More likely the closure has come about because the new top management team, led by ex-Procter & Gamble executive Paul Polman, couldn’t see Chrysalis’ long-term relevance. Indeed, Weed specifically referred during the Cannes debate to Polman’s decisive influence in making lines of communication with the consumer simpler and more direct. A complex hybrid operating system, and a business culture licensed to be irreverent, may have had no place in his thinking.

Does the dissolution of Chrysalis matter? In the short term, no. Matt Burgess, formerly managing director of Chrysalis UK, remains in charge of the Marmite, Bovril, Pot Noodle and Slim Fast brands as md of the new “integrated” unit Incs. I suspect, however, that some of the fizz has come out of the laboratory idea, that the future of the brands will be more pedestrian, and their value more meticulously cost-accounted.


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