The overall performance of Campaign's Media Agency of the Year, Carat, looks even more impressive in light of the paucity of new-business pitches made in 2006.
This year was Carat's best ever for new business. The agency has been successful in 27 out of the 38 pitches it undertook, winning and retaining £297 million worth of new business out of a possible £368 million up for grabs - that's an 81 per cent success rate.
The previous year had been a period of transition that began with the departure of senior management figures at Carat and its parent company, Aegis, and ended with the agency losing its prized News International account. It had won other pitches, notably COI TV buying and Abbey National, with a combined value of £150 million, but in 2006, the agency came out with all guns blazing.
Carat's list of successes is impressive. Its domestic planning and buying wins included Alliance & Leicester (£27 million), Love It!/News Magazines (£8.5 million), Abbey Digital (£8 million), Littlewoods (£4 million), Yahoo! Answers (£4 million), COI Cinema (£3.6 million), Network Rail (£3 million), Airmiles (£3 million) and Google (£2 million).
Carat also came out on top in a pitch for the COI Navy/Royal Marines Planning business, having snatched the brief from Mediaedge:cia, the incumbent on the account for 20 years. Indeed, this was one of many impressive COI triumphs. The agency won a place on rosters for COI communications planning, data planning and sponsorship and at the end of the year picked a £5.5 million brief from the DVLA. Carat also had a hand in some spectacular network triumphs. These included General Motors (£400 million), with Carat being assigned to handle the £85 million UK business. Carat's digital strengths - in the form of its sister agency Isobar - came to the fore in May, when it picked up the combined Adidas/Reebok business, which the sport giant spends £12.4 million on in the UK.
In terms of client retention, Carat fought hard to hold on to two big accounts: Asda's £40 million UK media business and Dell's £45 million UK brief. But the agency's copybook was not completely unblemished: the most painful loss was the long-held Danone account (£28 million). Burger King (£9 million) also walked, as did American Express (£11 million) at the end of the year. Danone was a real blow, but in light of so much new-business success, Carat had no reason to dwell on it.
The billings picked up in 2006 will increase Carat's turnover from £677 million in 2005 to more than £820 million in 2007, a rise of 21.3 per cent. It is now set to jump from fourth to second in the UK agency billings league.
Carat also underwent a root-and-branch restructure in July. The managing director, Neil Jones, split the agency into six "multidisciplinary" teams. The result was six mini-agencies, each with its own boss. The teams are designed to contain everything a client could want in one room, from data and digital to insight and sponsorship, as well as traditional media planning and buying.
Jones promoted the head of media, Steve Hobbs, to the new role of head of planning and integration, to oversee the six business units. Jones and Hobbs' aim is to create a more collaborative way of working with clients, arguing that it's much easier to deliver integrated solutions if your own business is itself integrated.
With the new structure in place, there is now less reliance on big, centralised planning and buying teams, which means that a greater proportion of Carat's revenues will come, over time, from non-core buying.
Carat's digital credentials are some of the best in the market. On a network level, the agency has the support of Isobar, but domestically, its in-house operation also put up a good show. Led by Henry Rowe, there were no losses, and it won £15 million worth of new business, including Abbey and Yahoo!.
In terms of producing work with high creative standards, Carat didn't pull any punches this year. The agency introduced the Communications Framework, which was a consumer-centric approach to media planning, which saw every member of staff trained to provide solutions for the changing media landscape. This new approach gave birth to some compelling case histories for Shelia's Wheels and the Department for Transport, among others.
In the case of Shelia's Wheels, Carat had to convince the insurer to ditch its direct response approach. Carat's idea was to spend half the category norm on TV, and launch Shelia's Wheels as a fashion brand. This risky approach paid dividends and the campaign exceeded targets by more than 58 per cent.
The Think! teen road safety campaign had the tricky task of making road safety an issue relevant to hard-to-reach teens aged between 11 and 16. Carat's idea - which integrated TV, online and cinema - succeeded in encouraging teenagers to create and distribute the message themselves. The campaign scooped Best Total Communications Programme at this year's Campaign Media Awards.
Carat successfully blazed a trail on the new-business front in 2006, as well as putting a forward-thinking, dynamic structure in place. The results of Carat's restructure are plain to see in terms of the work produced and its new-business record.
The agency that came a close second to Carat, a very close second, was Mediaedge:cia. As turnarounds go, it doesn't get much better than this. In 2006, the WPP-owned agency hit a rich vein of form, winning considerable new business and strengthening its reputation for strategic thinking.
This year's wins culminated in its appointment to the £28 million Danone business after a four-month pitch against OMD, Carat and Media Planning Group. Other wins included COI's £25 million anti-smoking brief, Nintendo, Blockbuster, Monster.com, Right Guard, Coca-Cola and The Famous Grouse. The agency also successfully defended the £10 million Wickes account.
Mediaedge:cia's new-business success only tells half the story. It also seems to have raised its game in terms of the work that it is producing for clients; the capture of a number of strategic briefs from COI is evidence of this. At the recent Campaign Media Awards, the agency won the Grand Prix for its work on the Xerox "It makes business sense" campaign.
The agency has benefited from having a strong management team, which hasn't been the case in previous years. Tom George, the agency's newly installed UK chief executive, has steered it through 12 months of solid new-business success. He has also led a progression in the agency's non-traditional services, such as sponsorship and digital, which now account for more than half of its revenues.
OMD had a strong year. The combined might of Manning Gottlieb OMD, OMD UK and M2M notched up second place in Campaign's new-business league, with £78 million- worth of wins, including Waitrose, John Lewis and the consolidated Virgin Media account.
Its new structure is showing signs of working, with group operations such as its strategic unit, OMD Ignition, providing good support. There has also been outstanding award-winning work from OMD UK for Vodafone that has been underpinned by a strong buying operation. OMD's year was rounded off when the group chief executive, Nick Manning, stepped down, to be replaced by the OMD UK managing director, Steve Williams.
Recent winners: PHD (2005); MindShare (2004); MindShare (2003); Naked (2002) Starcom Motive (2001)
HIGHLIGHTS OF 2006
March Wins £8m Abbey National digital brief.
May Wins Adidas/Reebok £13m media business.
July The managing director, Neil Jones, implements a root-and-branch restructure.
August Carat successfully defends its £40m Asda account following a closed review.
September Carat is appointed to handle media duties on Alliance & Leicester's £30m media business.
October Carat defends its £45m Dell account following a competitive pitch.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum.