The Annual 2006: Media Network of the Year - Carat

campaignlive.co.uk, Friday, 15 December 2006 12:00AM

A succession of outstanding new-business wins marked the year Carat made a serious impression on the global stage and left rivals in its wake.

No-one could touch the Carat network in 2006. The continued investment in its digital services, top talent and a blistering new-business record made this year its best 12 months to date.

Its European wins were particularly impressive, culminating in one of the biggest shocks of the year. In September, General Motors took the industry by surprise and switched its £400 million pan-European and UK media account to Carat without a pitch. The win was the result of Carat's strategy of keeping conversations alive with GM after an unsuccessful pitch for the European business two years ago.

But there were many other reasons to celebrate throughout the year. A final shoot-out against the main incumbent OMD saw Carat scoop the highly sought-after £160 million Adidas Reebok media business.

Worthy of note was the role Carat's sister digital network, Isobar, played in the success. The pitch was led by the chief executive of Isobar, Nigel Morris (bottom, right), and indicates that going forward, digital credibility on a network level will become a key tool in fighting global media pitches. Immediately after the news broke, Uli Becker, Adidas' head of global brand marketing, gushed about the strength of Carat's " strategic vision".

In the US, Carat remains a relatively new proposition at only eight years old. However, the network picked up the prized Wal-Mart business in the autumn to add to a client list that now includes New Line Cinema, Hyundai-Kia and Procter & Gamble.

The win of such a major US account marked a tectonic shift in Carat's fortunes in the US, and the network is now firmly established as a major player in that market.

Other international account wins included Luxottica (Ray-Ban), Black & Decker and InterContinental Hotels, while Carat successfully defended its Dell and EMI accounts across Europe. The group also picked up Fiat/Lancia in Germany, Cadbury in Mexico, Gap in the US and Nissan in Australia.

The arrival of Mainardo de Nardis (bottom, left) as the head of Aegis Media was another feather in the Carat cap. The former WPP man comes with a big reputation, new contacts, strategic thinking and support for the Carat network's three regional chief executives: Jerry Buhlmann (bottom, second from left) in Europe, David Verklin in the Americas and Patrick Stahle in the Asia-Pacific region.

Carat's regional structure has always been lean enough to drive quick decision-making, but adding a global layer on top has furnished the network with extra talent and a fresh perspective.

This has been a big year for the Carat network in terms of its overall promise to clients. In a bid to prove its credentials in reaching the right consumers, it launched its "Transforming Communications" positioning. The mantra means the network promises to put planning ability, not buying skills, at the centre of its offer. It also launched the "3Cs", a wide-ranging training programme for 3,000 staff to ensure they are up to speed on the Transforming Communications promises.

To back this up, Carat has also invested heavily in new planning talent. The appointments include Rob Kabus in the Asia-Pacific region, Johann Wachs in the US and Mondher Abdennadher in France.

All of this has helped to propel Carat's Aegis parent, ably led by its chief executive, Robert Lerwill (bottom, second from right), to an impressive set of results in the first half of the year, with profits up by nearly 9 per cent. Underlying pre-tax profits increased to £38 million, up by 8.9 per cent against the same period the previous year.

The growth is set to continue apace. The results revealed that a high proportion (19 per cent, up from 13 per cent) of its total revenues now come from digital sources. The group expects that digital advertising will account for 50 per cent of its revenues within two years.

This was the year that Aegis confounded its doubters and once again proved its value as an independent network, unhindered by ownership from one of the large advertising holding companies.

However, there was one black mark on Carat/Aegis' copybook: the German justice department's investigation into allegations of embezzlement involving three former Aegis executives. The individuals involved were suspended by the company in September and later removed from their jobs. At the time of writing, the investigation was ongoing. The signs are that Aegis was the victim, albeit one whose vigilance of its German operation needs examining.

ZenithOptimedia Last year's runner-up as Campaign's Media Network of the Year had another good 12 months. There were a number of local new-business wins, the development of its digital capabilities was impressive and, overall, the network appears to have built on the progress it made in 2005.

The network won L'Oreal in Australia and China at the beginning of the year, and in the same month picked up Hyundai in India. Other wins included Whirlpool in the US, Nestle in three markets and TNT across five European markets, including the UK.

Zed Digital was formally launched as Zenith's global digital brand at the beginning of the year, with all of the network's interactive and digital units rebranded under the Zed banner to bring greater cohesion to Zenith's digital offering. Zed Digital now has 430 dedicated staff in 23 countries.

It also made some acquisitions, including Pole Nord, a leading search engine marketing company based in France. The company's services have now been rolled out across Europe. In the US, Zed acquired Moxie Interactive, an award-winning digital agency based in Atlanta. The agency has offices in five major US cities, with a complete suite of digital services, including creative developments.

The network also made an investment in new territories in a bid to capitalise on emerging markets. Offices were opened in Belarus, Georgia, Japan, Moldova and Pakistan. In the UK, ZenithOptimedia's UK chief executive, Antony Young, stepped down to run Optimedia in the US. He was replaced by Gerry Boyle, the agency's managing director. Elsewhere, Guy Abrahams was moved from the UK to Asia-Pacific to beef up communications planning, while Sergio Lorca, the former chief operating officer of Initiative in Europe, took a new role as the chief executive of ZenithOptimedia Iberia.

ZenithOptimedia benefits from a stable management team, led by the global chief executive, Steve King, with many of the leading figures having been in their positions for some time. The international roll-out of Zed should give it extra impetus during 2007.

OMD It was a quiet year in new-business terms for OMD, but after a storming 2005, when it was named Campaign's Media Network of the Year, it can perhaps be excused.

Instead, it focused on helping Omnicom to build Omnicom Media Group through the creation of a group structure, and by moving some of its staff to help launch PHD as a network. It also continued to invest in digital as a core part of its offering, hiring digital directors in both China and Europe.

Its work for Sony and Apple was lauded at several awards ceremonies, and OMD's management remained stable under its global chief executive, Joe Uva, and his regional chiefs. A good, strong year for a network that is now among the best.

Recent winners: OMD (2005); MindShare (2004)

HIGHLIGHTS OF 2006

- May: Wins £160 million consolidated Adidas Reebok account.

- September: Mainardo de Nardis arrives as the head of Aegis Media. Aegis announces healthy first-half results on the back of $1.3 billion-worth of new business. Digital revenues account for 19 per cent of its total revenues, up from 13 per cent the previous year.

- Late September: Lands £400 million General Motors pan-European account.

- October: Carat ruffles feathers in the US when it beats Omincom to Wal-Mart's £300 million media business.

This article was first published on campaignlive.co.uk

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