The Media Barons - John Perriss
campaignlive.co.uk, Friday, 27 September 2002 08:00AM
With his blueprint for the Optimedia/Zenith operation almost finished, John Perriss talks with Alasdair Reid about how global media is approaching its phase of maturity.
There's not much of a view from the window of John Perriss' office - unless, that is, you're a big fan of 19th century industrial infrastructure. A couple of hundred yards off there's the grimy old wrought iron and glass engine shed that is Paddington Station; while way below, tucked right in at the foot of Zenith's North Wharf building, there's an inlet canal leading to Paddington Basin.
Something about the prevailing weather conditions on this particular neck of water makes it act as a trap for all the disposable plastic flotsam that canals attract - from polystyrene beakers and crisp packets to ... well, you can imagine. The way it appears to have been neatly marshalled outside the building makes it look as if the Zenith staff are spectacularly debauched litter louts.
Perriss apologises. Not for the view itself, it turns out, but because of the decrepit, dust-encrusted portable stereo on the windowsill. It's there for listening to The Archers, he explains, when he has to work late (Radio 4's rural soap is on at seven every evening) - and you have to reckon this happens rather a lot.
Perriss, who doesn't appear to have a single strand of slacker DNA in his whole genetic make-up, has been even busier than usual during the past few months. Almost exactly a year, as it happens. And the past few months have been even more intense than they might have been because the whole project is miles behind schedule. There have been lengthy delays caused by boardroom shenanigans.
When Publicis bought Saatchi & Saatchi in 2000, it acquired a 50 per cent stake in Zenith Media Worldwide. The other 50 per cent of Zenith was still held by Cordiant Communications Group, but many observers reckoned that CCG would immediately sell up, leaving the way clear for the outcome that everyone believed inevitable - the merger of the Publicis-owned media operation, Optimedia, with Zenith.
But CCG dithered and it took what seemed like forever to reach the compromise we have now - it has sold 25 per cent to Publicis (thus helping with its debt crisis) and retained 25 per cent as a future earner, confident that Zenith Optimedia is going to return some spectacular growth figures once the downturn is over. Once all of that was thrashed out, it was no surprise to see the Zenith/Optimedia merger being given the green light - and even less of a surprise to see the top job being handed to Perriss.
He took up his new position at the start of November last year.
He's now putting the finishing touches to his blueprint for the new operation but his frustrations at the enforced delays are palpable. "There was no management involvement at all in the negotiations," he explains. "They had to have shareholder agreement and when that was agreed they involved the executive management. There's a real difference between my previous experience and the French way. Our way is to have a plc board with an executive group supplemented with non-executive directors. The French have a supervisory board and a separate management board. The first we knew anything in detail was September last year." And every major decision still has to be signed off by two sets of shareholders, which makes it hard to maintain momentum, Perriss admits.
This is clearly not the Perriss way. He is used to dictating the pace and he's clearly a fan of the Anglo-Saxon approach to business management.
So in some respects, he's entering uncharted waters - a remarkable notion given his track record and status in the industry. This is not to say he is oblivious or insensitive to the nuances of Europe's many different advertising and business cultures. Far from it. Back in the 80s, as Saatchis' worldwide media director, he built its media departments in Europe into one of the most effective networks around, and after 1988 he then re-engineered it all as Zenith's European network.
In that respect, Zenith Optimedia is merely book three of the Perriss saga. And he doesn't think we'll find anything earth shattering about the new structure he's about to unveil. The fundamental principles, he says, aren't exactly rocket science. "In Zenith and Optimedia we have two strong brands, but neither, in terms of their market reach, is strong enough in all the key markets to actually consider itself one of the top five players in its own right.
Whereas together they are top five in all European markets, easily a top five player in the US and a top three player in Asia. All we've got to work out then is the absolute detail of how you bring those businesses closer together without either conflicting yourself with existing clients or getting the human chemistry wrong and losing some of your own people."
It's the equation that all the big holding companies have been trying to balance for the last couple of years. It's all about leveraging the assets you have. For instance, bigger buying points can have more robust and wide-ranging negotiations with the mega-media owners. But that's not even the half of it. It's also about trimming margins so you can be competitive where client terms are concerned while still being able to invest in the software, research and analytical tools (mind-bogglingly massive undertakings these days) needed to keep your product at the leading edge.
But you've got to do it while guaranteeing client confidentiality. One of the cleanest models is the one proposed (it's not quite working smoothly as yet) by Interpublic. Both Initiative and Universal have separate worldwide management structures, separate profit and loss responsibilities but buying negotiations are pooled into a specialist unit called Magna. The structure allows pooling of business where effective, but keeps client conflict at a minimum by retaining two client-facing operating units. Is that loosely the blueprint for Zenith Optimedia? Not really, Perriss responds - there will be some important differences.
"For budget and P&L purposes, there will be one entity called Zenith Optimedia and within that Zenith and Optimedia will effectively be account groups. Media strategy, planning and account service will stay distinct.
At a pitch, for instance, it might be the Optimedia Group of Zenith Optimedia," he explains. The recent win of the £48 million MBNA Europe account shows how this will work, he adds.
But where the ultra-sensitive subject of client conflict is concerned, no one blueprint can cover all eventualities, he cautions. The way the new structure is implemented will be subtly different, market by market.
And, indeed, in some countries, the concept will be easier to manage because the ad market is spread over several locations. In the US, for instance, where there are a handful of offices across the country or in Germany where Dusseldorf and Frankfurt remain dual centers of ad industry activity.
Will it work? As Perriss points out, not unreasonably, all this talk (eloquent as it is) is hardly the point. Come back in a year's time and ask me, he challenges.
But if anyone can make it work, it's Perriss. His track record is awesome - and he's one of a handful of men who can claim to have reinvented the advertising industry over the past couple of decades. His impact on the US market alone gives Perriss a place in history. When he launched Zenith in the States in 1995, he was part mocked, part reviled. Now unbundled media is the norm in the US, as it is around the globe.
When he launched Zenith in the UK in 1988 he said that one day in the not-too-distant future, the media market would be dominated by five mega-planning and buying groups. Right again. But in that respect, any satisfaction he's likely to get from his task might be tinged with something more reflective. The Perriss revolution is now complete, isn't it?
"Everyone has a lot of work to do and there's a lot of mopping up to be done but yes, basically, you see the five groups now that are going to make this up. And it's interesting, isn't it, that they have all ended up back with the big five marketing services groups because I don't believe Carat will survive as an independent company," he says.
So is this, then, the end of history as far as the media marketplace is concerned? Not a bit of it, Perriss responds. In fact, the media industry is only now entering it's first truly sophisticated phase. When Zenith first opened its doors it was heavily criticised for being a commodity discount warehouse - an ugly shed in Paddington. Perriss has worked hard to dispel that (mistaken, he insists) understanding - and he argues that the media business is moving beyond the brand positioning squabbles of the early years.
If, to the outside world, the big five sometimes seem to lack brand positioning and product differentiation, it's because they are far more client focused these days. It's about delivering what the client wants and needs. And, he adds, the business is as creative as it's ever been.
So, what does the future hold? Publicis has only recently completed the Bcom3 deal which, of course, brings Starcom and MediaVest within the group fold. How they dovetail with Zenith Optimedia could be a future project for Perriss. But he refuses to speculate that far ahead. Long term, all he will say is that he can't see himself in harness at 60, which gives him six more years.
He's always had the same wiry energy he has now but these days he has a blasted, weathered look about him. In his lined face and in the severe sweep of his grey hair, he sometimes strikes you as a cross between Ahab and an evangelical preacher in some southern US state. There's something as severe as Abraham Lincoln in his eye as he fixes you in one of his stares. Or, perhaps, a French revolutionary Jacobin.
These impressions don't last for long, though. Perriss has a warm and self-effacing sense of humour. He has always seemed genuinely without affectation or preening vanity. He's open and straightforward. He has the easy assurance of a man who knows he was right all along.
No-one gets to the commanding heights of business and manages to stay there for as long as Perriss has without being deft at playing corporate politics. Or, for that matter, without being able, when necessary, to be utterly ruthless. Apparently, he can be terrifying when in full flow.
But he's not the only manager in town who can tear strips off people and, on the other hand, he has a rare capacity for generosity.
He's generous with his time, generous in his assessment of others, both colleagues and rivals. For instance, he's convincingly diplomatic about the fact that he got the nod over Optimedia's boss, Simon Lloyd, for the top job. And, indeed, on the strengths and weaknesses of the Optimedia operation. The industry view has always been that the Zenith culture was far more robust, effective and focused than Optimedia's. The consensus was also that Perriss versus Lloyd was no contest. If it had been a steeplechase, the bookmakers wouldn't have been offering odds. Perriss laughs at that. "Depends on the distance," he says.
And Perriss knows a thing or two about horses. There are framed photos of several he owns (including a couple of steeplechasers) on the wall behind his desk. But the departure of Lloyd was surely further cause for reflection. There aren't many of the Perriss vintage still left in the industry are there?
"Campaign keeps asking if Perriss will survive. But there always seems to be another challenge, doesn't there? I will definitely see this whole Zenith Optimedia process through because I find it so fascinating," he responds.
"People keep changing the bloody rules, don't they? And actually, I find it absolutely fascinating working with the French. It gives me an insight into another world that I didn't know in any depth before. I'm learning about how you go about getting things approved. I'm finding out where the hot buttons are in this new company. That in itself is hugely challenging," he says.
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This article was first published on campaignlive.co.uk
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