OUR MAN IN BARCELONA: Fernando Rodes, the chief executive of Media Planning Group, talks to Claire Beale about Havas' cheque book and his global ambitions

Barcelona: city of steamy Mediterranean breath, simmering passions, clandestine alleyways, curvaceous Gaudis and, ahem, the world's ninth-largest media network.

Barcelona: city of steamy Mediterranean breath, simmering passions, clandestine alleyways, curvaceous Gaudis and, ahem, the world's ninth-largest media network.

The headquarters of Media Planning Group, newly acquired by Havas and full of international ambition, is tucked down a sunny side-street in a quiet residential quarter of the city. It's the hub of a rapidly expanding empire with all the easy amiability of a sleepy regional agency.

Where other top media dogs mark their status with corner offices with Manhattan skylines, MPG's chief executive, Fernando Rodes, has a rather more pedestrian view. The most interesting thing in this office is not the way the wall-to-wall window frames the Statue of Liberty, but his children's crayon scrawlings and the Catalan cookbooks.

MPG flourishes its Catalan roots with pride. It might seem odd to marshall a global media network from a city more associated with fine living than hard business, but MPG's rich Spanish heritage marks it out from its increasingly amorphous rivals on the global media stage.

Which is just as well, because its other obvious characteristics are not quite so positive. MPG has neither clear business positioning nor geographical might. It's a network that has more holes than an old pair of fishnets - though, in truth, the same still holds true of many of its more established competitors. Its top- level management urgently needs an injection of weight, while unified systems and structure must be a top priority. MPG ranks ninth in a world where anything below fifth or sixth is verging on the critical list; the inexorable march towards consolidation takes no prisoners.

So far, so bleak. But where other networks have already worn themselves through with internal political battles and the grind of slow international expansion, MPG is a fresh-faced player on the global stage and one full of enthusiasm for the fight ahead. It debuts with a unique perspective, an impressive history (at least from the original Media Planning side) and, in Havas, the backing of the world's fourth-largest communications group. Rodes is confident MPG will storm to fifth in the global media billings within three years.

High ambitions for a company for so long isolated in the Spanish-speaking markets. But MPG has come a long way since its launch - by Rodes' father, Leopoldo - as Spain's first media independent in the late 70s. Expansion into Hispanic markets around the world followed and by 1999 Media Planning was, Rodes says, 'a happy company of 600 or 700 people with a clear vision of being number one in Latin America and the countries of origin. But there were definitely worries.

'We were worried that globality was not going to be just an idea but something that would fundamentally affect our way of doing business. We worried about who we could have as a global partner who would allow us to act globally in front of clients. Those worries and frustrations were so strong that by 1995 we decided to create a whole department to seek international alliances.'

There followed an intricate dating game between Media Planning and all of the major international holding companies. 'With the big three companies we went on a very long time with conversations but they were always only interested in buying us - acquisition was the only word that came out of their mouths.' Havas, though, 'was the one group we didn't want to see. Don't ask me why because there is no reason.'

Finally Alain de Pouzilhac, the chairman and chief executive of Havas, came calling. Acquisition wasn't his agenda, Havas was looking for a merger between Media Planning and Havas' own Media- polis media network. Rodes says: 'We couldn't ever talk to people who thought that media should be part of the agencies and these guys understood that very well. Havas saw that Mediapolis wasn't flying at the speed they wanted and it became clear that we had total geographic compatability.'

In 1999, the Spanish-flavoured Media Planning and the French-flavoured Mediapolis merged. Havas took a 45 per cent stake in Media Planning and handed the media agency the right to absorb all of Havas' independent and in-house media operations. Announcing the deal, De Pouzilhac said: 'We wanted to develop our media activities in order to make them more autonomous, more specialised and more international.' Media Planning, he added, were 'highly qualified partners, fully complementary in terms of location and client roster'.

Nevertheless, the merger didn't set rivals quaking. The geographical fit was good because neither network had significant geographical presence. Media Planning was virtually unknown outside the Hispanic markets and Mediapolis was generally an also-ran beyond the French borders. The deal also served to underline both companies' northern European roots at a time when bland internationalism was the order of the day.

Why didn't Havas hold out for a stronger partner? Well, as True North is now discovering, media networks of any substance are virtually impossible to come by. Aegis and Tempus remain the only players of any international weight.

But perhaps there was a more cultur-al force at play. The northern European connection is a very powerful glue. 'Alain is from a city in France called Narbonne,' Rodes explains.

'It's only a few miles from here. They speak a French patois which we understand very well, they drink and eat the same things I do and that unites a lot. Culturally, though Alain is French, he's from the southern part of France, I'm from the northern part of Spain, I have more in common with someone like Alain than I do with someone from Madrid.'

Such empathy, though, did not help hammer the networks together in markets such as the US, where progress was painfully lumbering. 'Integration was too slow,' Rodes admits. 'But it certainly wasn't because of a lack of will or effort.'

The solution came at the beginning of this year when Havas finally swooped on the rest of Media Planning's shares, offering pounds 32.5 million in cash and 28.8 million new Havas shares (9.3 per cent of the company) in return for the remaining 55 per cent of MPG.

The reasoning, Rodes says, is clear. 'Vivendi had announced it was decreasing its stake in Havas and the company needed to reinforce a little bit their shareholding structure; they saw the Spanish shareholders as a potential substitute. Also Havas was not consolidating our figures on their US balance sheet. But third, and most important, they wanted the media business to grow much faster than it was.'

De Pouzilhac says the deal will allow Havas 'to consolidate our leadership position in Latin America and the European markets, as well as accelerate the expansion of the media business in other areas where Havas Advertising has a strong presence.'

Rodes says the deal's not simply about expansion, though. 'It will allow us to increase the level of quality we're delivering to our clients. Our real priority is how to add more value for advertisers. We have the opportunity to be a key counterpart in the strategic decisions on marketing; we are here not only to plan and buy but to give clients a clear picture of communications issues, both locally and globally, now and in the longer term. To do all of that we need resources - firstly human, then structural and finally financial. Now we have the deal with Havas, those resources are easier to find, we have the means to commit financially in a way that not everyone on the Spanish side was ready to.'

MPG has already carved out some interesting strategic offerings, from the launch of the first media planning department back in 1981 to establishing an ideas-led media consultancy, Arena, which could now be rolled out into suitable markets. But there's still so much work to be done on the foundations of the business. In major markets such as Asia-Pacific, MPG has to rely on a tie-up with WPP's MindShare to be able to offer anything like decent coverage. Rodes says: 'We're happy with our arrangement with WPP and not only that, Martin (Sorrell, WPP's chief executive) knows perfectly well that we need them and would like to keep them. We would like to see if we could find enough value for both of us to keep not necessarily this deal but some type of deal. If it doesn't make sense, we'll find someone else.'

And even in Europe MPG is riddled with empty spaces. There's no MPG flag in Germany or Italy, though both are high on the agenda, or Scandinavia. The UK office is steady but hardly a bubbling hub for northern Europe. But Rodes insists things are not as patchy as they might seem. 'In some markets like Spain and France we are considered excellent. But in the US and the UK we're considered not so good, which is totally unfair. Our strategic work in London is at least as good as it is in Barcelona. In some markets we have more clout than in others but in the UK, for example, I believe we buy as well as anyone else in the market. Where we don't have the critical mass, we will strike an agreement with someone to buy on our behalf until we launch our own operation. So I really think we are offering a quality service everywhere.'

Somewhat bizarrely, Bob Offen, the chief executive of Media Planning London, has now become something of a flying guru within the network, ensuring a standard quality and service across borders. Rodes says: 'The UK is considered one of the best offices in the group. We are basing the way we are now going to approach clients on the UK model and Bob is helping us to do that, but not just Bob, a few little Bobs, too.'

And in the US, Rodes is rubbing his hands over the prospect of absorbing all of the different brands into an MPG whole. 'When we did the first deal with Havas we took on SFM which was a pure buying operation - no planning, but well managed and placed at number 12 with 150 people. Now after 24 months we already have a group of 450 people and we haven't integrated the Arnold business yet. But Arnold is an excellent business, excellent, and eager to become part of MPG.'

There's no doubt that sorting out the US must be top of the list. Rival networks may only just be smoothing their US media offering, and still dodging internal political bullets, but the game is moving on swiftly. The argument for shifting MPG's central focus to New York is also a powerful one, though Rodes seems reluctant. 'We've already moved Media Concepts (MPG's interactive offering) over there and the R&D unit. We might, might, move Media Planning but we're not sure yet.

I really have to think about what I'm going to do with myself. Madrid, London, France, New York are all very important centres for us now. I have strong romantic feelings towards Barcelona but our centre of gravity now could be anywhere. Yet I think that in the new world it is very stupid to have the model of big headquarters. We try to avoid that in our office in Barcelona. We will never have it.'

For all Rodes' easy charm and warm Mediterranean hospitality, his ambitions are clear and honest. He knows that with or without the punch of a mighty US headquarters, MPG cannot afford to simply paddle in the back-waters. 'We now have billings of dollars 8.5 billion and are more or less satisfied with the situation. But we have to become a real global company in the way we approach clients' communications.

I cannot tell you that we are going to be number one in Germany in three years but we should fight hard to become a serious player in the five key European markets, be one of the top in the US and maybe launch one operation in Asia. I really think we can do it.'

First MPG needs a stronger international management line-up to drive the core operation and tap new business. Even then, its ability to surge ahead without relying too heavily on affiliations with the likes of WPP in key markets is in question. Havas, though, is already sniffing around further acquisitions which may bring additional media muscle. Perhaps then Rodes and MPG's immensely likeable style will start to give their blander competitors something to worry about.



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