Latest Initiative win makes life hard for embattled MPG
campaignlive.co.uk, Thursday, 02 October 2003 08:00AM
Well I never. Initiative Media, an agency with a UK presence as elusive as the Goa-based Lord Lucan lookalike Jungly Barry, has pulled off the new-business coup of the year, writes Ian Darby.
As part of a review of its pan-European media account, France Telecom has handed Initiative the £68m UK task that includes planning and buying for Orange and Freeserve (won from Media Planning Group and Walker Media respectively).
This comes just days after Initiative added the £22m Saab business to its General Motors portfolio and captured the ICI business from Carat and PHD.
Initiative's France Telecom UK win came as a surprise because MPG was thought to be going head to head with OMD Europe for the account. Instead, after a long-winded process that made last year's Sony marathon appear both rational and fair, the telecoms group has split its nine markets between MPG and Initiative.
"The only winner will be France Telecom because it will reappoint MPG in most markets and get them much cheaper," one agency boss predicted a few weeks ago. Almost, but not quite. Having snuck up the back staircase in a clandestine fashion reminiscent of Carat, Initiative emerges with the business in five key markets.
Its win of the UK account is a triumph for all at Initiative, particularly its pleasant but previously unspectacular chief executive, Jerry Hill, who, after defending Unilever and GM, is now putting Initiative on the map.
So chapeaux off to all at Initiative but what a blow for MPG in the UK. While the Havas-owned network fought off the catastrophic prospect of losing the giant France Telecom business in France and will also co-ordinate the pan-European business, the UK loss raises questions over its future direction in the UK.
Billings for MPG in 2002 were reported as £118m. The Orange UK business is worth £54m in billings. This would have left MPG with billings of £64m had the loss happened at the end of last year, making it a smaller agency than Brilliant Media and Feather Brooksbank. It has won little since.
Hardly a sign of health for a network committed to a global expansion plan. Some tough decisions now face Havas and the MPG management. And, let's face it, the options have narrowed in recent months as Havas itself made a first-half loss this year of £41m.
MPG's UK plan for organic growth is just not working. The Orange loss is the latest that seems to confirm this view. However, growing through acquisition will also be tough. Early talks took place this year with Walker Media but were called off. Havas would have to pay a high premium and now the main motivation for MPG and Walker to retain their France Telecom business has gone.
The best option might be to beef up senior management with some dynamic new blood, but it's a long shot.
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This article was first published on campaignlive.co.uk
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