LIVE ISSUE/CIA MEDIANETWORK: Why CIA Medianetwork requires radical surgery - The agency’s UK operation is set for critical changes. Richard Cook investigates

Good agencies can lose business. Good agencies can have top staff lured away. Good agencies can even, from time to time, find themselves treading water. And CIA Medianetwork is a good agency.

Good agencies can lose business. Good agencies can have top staff

lured away. Good agencies can even, from time to time, find themselves

treading water. And CIA Medianetwork is a good agency.



It is, as even its legion of detractors would admit, one of the three

media brands almost any client has heard of. In terms of name

recognition, it ranks with Zenith and Carat - and starts all

new-business pitches with the hard-won advantage that a long and proud

media heritage conveys.



So why is CIA Medianetwork UK in such disarray? Why is it now a name

that rivals long to pitch against? Why has the agency dropped out of the

list of the UK’s top ten media buying points for the first time with

last week’s loss of both the pounds 12 million Lloyds-TSB media account

and its UK share of the pounds 100 million that sanpro and toilet tissue

manufacturer, SCA, spends across Europe?



And why is a company that has already survived so much - the pounds 2

million cheque it had to write to settle its overtrading dispute with

Laser, the loss of the entire BT business - now apparently starting to

suffer?



’It’s quite clear there are a number of things we need to do and we are

doing them. But while we are in the middle of attending to that process,

no-one from this company is going to make a comment about them,’ was how

the group chief executive, David Reich, initially reacted to this line

of enquiry.



But we’ve been here before. CIA’s chairman, Chris Ingram, had already

expressed the company’s disappointment at the last set of UK trading

results announced by Tempus, its holding company.



However, Reich’s initial statement was quickly overtaken by events. CIA

fell so far, so fast, that it soon became clear nothing less than

radical change was necessary - and that is what the company is

promising. There is a relatively new man in town. Mainardo de Nardis,

the head of CIA’s successful European operation, is to become the new

chairman of CIA Medianetwork UK.



He is promising rationalisation, not least a hugely simplified structure

with none of the raft of holding companies that has characterised the

operation in the past. For starters, the Negotiation Centre is being

merged with the rest of the operation under the new deputy chairman,

Tony Kenyon.



And de Nardis has a good story to sell. The Medianetwork brand is

powerful across Europe. Unusually for a UK-based operation, it is the

mother-ship holding back the operation. There seems to be two reasons

for this.



The first is the personnel. There may have been no shame in losing Nick

Manning and Colin Gottlieb to set up their own company - and some

departures, such as Ian Rogers, have just been unfortunate. However, the

procession of senior staff like Ian Payne, Barry Croucher, Bob

Blatchford, Ian Prager, Mike Anderson, Marco Rimini, Nigel Allmond and

Mike Tunnicliffe out of the door at Paris Garden over recent years seems

more than merely unfortunate.



This wouldn’t matter if the calibre of their replacements had been of a

comparable standard. But the strong consensus is they haven’t.



There is, CIA watchers agree, a need for a charismatic front-person at

the UK operation - for someone who can work with clients. No client left

the company as a direct result of the Laser fiasco, for instance.



But things are different now. Not even Mike Elms’ greatest fans would

say schmoozing clients was his strongest point, while too much of his

management team seem merely anonymous.



Whether de Nardis can fulfil the need for charismatic leadership is

another story, but at least he is starting with a successful track

record. He was, after all, instrumental in helping to build CIA’s

25-country, 25-office European network in rapid time.



Under de Nardis’s plans for the UK, Elms reverts to the international

account management role he fulfilled at Ogilvy & Mather. ’He is not the

right person to run CIA. He’s a great international account man but not

a managing director,’ is de Nardis’s verdict.



A verdict, it has to be said, that many outside the company had long

since reached. There are also likely to be job losses as the new

streamlined structure is shaped.



And the appointment of de Nardis itself will not solve all CIA’s

problems.



He says that as an Italian living in London, he is perhaps not the right

man to lead a UK media company in the long term, and that the search for

a chief executive will continue. Whether that will be enough to silence

the doubters is unclear.



CIA has yet to signal that it believes its operational side has room to

improve. After all, the agency’s most recent high-profile recruit - CIA

UK Holdings’ managing director, Roger Powley - was poached from Carat,

where he built up a reputation for financial acumen, not for skill with

clients or creativity as a media strategist.



Which leads to the other main weakness in CIA’s current make-up - its

obsessive need to impress the City with its financial competence, rather

than clients with its creative equivalent. It is, perhaps, a legacy of

the agency’s difficult baptism into the City.



It took the CIA group three years to make all the preparations for its

1989 flotation. Ingram had to answer 225 questions of due diligence, had

to appoint a finance director and company secretary, and had to court

institutions and City opinion formers who were unsure of what a media

independent actually did. He had to do this and more - only for the

stock market to suffer its biggest collapse since Black Monday in 1987,

the week before the placing was scheduled.



The initial take-up of shares was slow and it wasn’t until 1991, when

the company made its first acquisition by paying pounds 700,000 for a 70

per cent stake in Media Solutions, that it started to win friends and

influence people in the City. Later that same year came the

establishment of 20/20 Media and the poster buying specialist, Outdoor

Focus - and the pattern was set.



Acquisition and expansion could mask all sorts of underlying trading

worries. And, to some extent, it still can. After the BT loss, for

example - a loss that insiders believe will cost the company about

pounds 3.5 million of income a year - the City seemed to be satisfied by

news of the acquisition of a small independent in the US as evidence of

more international expansion.



’There are too many people who like having the Gold Card and the

frequent flyer miles at CIA,’ says one observer, ’when what they should

be doing is sorting out the UK. But the City has let the company get

away with it and, for a while, clients were happy to pay for the

value-added, high-margin extras that CIA likes to offer to help its

financial performance.



’Until it realises that products like new media and sponsorship have to

be properly funded, credible companies in their own right and not just

one-man departments designed to get clients spending more, the brutal

truth is that CIA is not going to be at the races any more, let alone

winning them.’



Media perspective, p16.



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