Media: All about ... Interpublic's Mediabrands

Can the company succeed where it previously failed, Alasdair Reid asks.

We're never happy, clearly, on the Campaign media pages. Recently, we were tempted to take a rise out of Publicis for the almost comic brand of New Age corporate-speak it opted to use in its launch of VivaKi. This week we leap to the other end of the spectrum and fly headlong into Interpublic Group and its launch of an umbrella structure for the group's media properties.

Whereas Publicis had turned the colour button up so high it threatened to hurt your eyes, IPG opted for a more subdued approach.

Not without reason, IPG's critics and rivals say. For almost a decade now, the group's media operations have had little to shout about. With the best will in the world and the biggest story, that's not going to change overnight - though Nick Brien, the president and chief executive of the new organisation, has a determining vision of a new approach to media.

The new structure (its rather utility-issue name is Mediabrands) would, Brien asserted, be "committed to doing what is necessary to reinvent the media agency model as we know it".

History will be the ultimate judge of that, obviously. But there will be those who will point out that, though Mediabrands may seek to position itself as ground-breaking, it looks suspiciously like an attempt to recover some of the ground lost when IPG unpicked a similar structure, called IPG Media, back in October 2006.

1. The low-key nature of the Mediabrands announcement can also be attributed to the fact that Campaign managed to break many details of the new structure as far back as November 2007. This latest release merely adds faces to the organogram: as Brien steps up to lead Mediabrands, he will be succeeded as the chief executive of Universal McCann by Matt Sieler, who has been poached from PHD North America, where he was president. Michael Hudes, formerly the global director of digital media at Clear Channel will also join as (and he'll need an extra large business card for this one) the president, diversified media services and strategic development at Mediabrands. Richard Beaven continues as the worldwide chief executive of Initiative.

2. When, as a result of the financial scandals that began to engulf IPG in 2004, Michael Roth succeeded David Bell as IPG chief executive, Roth vowed to put media at the top of his agenda. The result was IPG Media, which was initially formed in May 2005, when Mark Rosenthal was confirmed as its first chief executive. IPG had already set up a group media negotiating arm, Magna Global, in July 2001 - but that has not been affected by subsequent deliberations about other forms of cooperation between the two main media networks.

3. At the time of its launch, IPG Media's remit was seen by some observers as being somewhat hazy. Roth stated that its primary role was to "knit together" the group's media assets but in effect its primary function was to pursue cost-cutting measures following a series of damaging account losses (clients moving at least some of their business included Coca-Cola, Nestle, Unilever and General Motors) affecting both Universal and Initiative.

4. But the form and function of IPG Media was almost inevitably subjected to renewed scrutiny when Rosenthal took indefinite medical leave in July 2006 and the decision to scrap it was taken in October 2006. Roth argued at the time that an overarching management structure was an irrelevance given a continuing desire for clients to buy into individual networks, not holding companies. Yet he chose instead to forge a new type of group connectivity - instigating closer links between Initiative and the newly formed DraftFCB creative network and underlining Universal's ties to its original parent, McCann Erickson.

5. However, following a review by Brien, who had joined as Universal's chief executive in August 2005, it was decided to reinstate a group media management level. Internal creative-media agency ties remain but now Mediabrands will ensure that the media networks "leverage resources" more closely in areas such as new business, digital media, research, technology and back office functions. In the UK, Initiative will soon go ahead with its long-anticipated plan to abandon its offices in Victoria and move in with Universal.

WHAT IT MEANS FOR ...

INITIATIVE AND UNIVERSAL

- There may be tangible benefits to emerge, clearly, but the greatest value of this initiative at this stage will be to boost morale internally. Individual agencies in both of IPG's media networks need to feel that they're still in the game and that the future could be bright. This will help.

RIVAL AGENCIES

- IPG's rivals tend to rate Nick Brien very highly indeed, but remain convinced that he faces a thankless task. The problem with IPG's media offerings, they suggest, lies not in the absence or otherwise of a global management superstructure but in the day-to-day reality at a local market level.

- IPG, they argue, slid into a slough of despond some time around the autumn of 2001 when the economic setbacks of 2000 were exacerbated by the 9/11 atrocities. IPG was already in trouble thanks to its acquisition programme but in 2004 it ran into even choppier waters with a series of financial and accounting scandals. Especially painful on the media side was a decision to return extra discounts that had been withheld from clients.

- Clients began exiting, which in turn made it very difficult to keep the best staff in important markets. IPG is finding it hard to pay big salaries and has little scope to offer equity.

- This is the cycle that Brien has to break if he's to return IPG's media agencies to the Premier League. He says he's up for the challenge. "We're fighting the fight in every market, every day," he says.

Topics