Arif Durrani: Mediabrands restructure goes beyond retaining Tesco

By Arif Durrani, campaignlive.co.uk, Thursday, 14 March 2013 08:00AM

Two topics dominated media talk around Charlotte Street last week: the exit of Alex Altman as the chief executive of Initiative and whether Tesco might be preparing to review its 20-plus-year relationship with the Interpublic agency.

Arif Durrani: head of media, Campaign / editor of Media Week

Arif Durrani: head of media, Campaign / editor of Media Week

Confirmation, if any were needed, that, locally, Initiative continues to be defined by its relationship with the UK’s largest retailer. Last year, Tesco’s media billings were in excess of £80 million, supplemented by a further €15 million in Ireland. That equates to more than 40 per cent of Initiative’s entire business. Such a stakeholder must hold considerable sway over the operations of any company.

Did Altman build a strong enough relationship with his uber-client during his two-year tenure? Some suggest not. But perhaps he never had full control of the account anyway. Tesco is not just the biggest domestic account for Initiative, it is the undisputed jewel in Mediabrands’ entire UK operation.

Increasingly, Tesco’s business has also been serviced by UM specialists such as Sally Weavers and the consultant Steve Kershaw, at the behest of Jim Hytner, who now spearheads global proceedings as the G14 chief executive. Did this take its toll on Altman? Hard to say for sure, but what we do know is that when the 44-year-old was offered the chance to vie for the one top job created at Mediabrands UK and Ireland in January, he chose to walk away.

'Did Altman build a strong enough relationship with Tesco during his two-year tenure? Some suggest not'

It feels an abrupt end for someone who, in a short space of time, had become the living embodiment of the gutsy and ambitious agency. Altman had helped raise Initiative’s profile by having a point of view, putting his head above the parapet and generally representing. During his time in charge, he brought in eight new leaders to the agency’s 10-strong management team, and all with future-facing skills – not least the digitally-ensconced managing director, Anna Watkins – who now takes control of the agency.

The general upheaval within IPG’s global positioning resulted in him having had four different bosses in less than 24 months - Richard Beaven, Eric Bader, Marc Bresseel and Jim Hytner. Hardly reassuring backing for someone looking to be an agent of change. And the media business, particularly in this climate, offers no guarantees, as Altman knows only too well.

We should remember he had led GroupM’s successful pitch for the COI business back in 2009/2010, when it was the undisputed biggest advertiser in the UK with £250m worth of spend. His rewards for finally stepping outside of Steve Hatch’s shadow at MEC, was to be preside over the business in his first chief executive role at the newly formed M4C. One general election and a new Tory Government later, and COI’s business had been decimated to sub £55 million within its first year. Altman left soon after.

His arrival at Initiative heralded new hope and a change of direction for the agency, with the promise of more strategic expertise than offered by his predecessor Gary Birtles, who was better regarded from an operational point of view.

His boss Beaven at the time pointed to Altman’s "impeccable reputation for delivering results and for leading business through development and reinvention". He said: "These skills will be invaluable as both Initiative UK and the Initiative network enter an exciting period of transformation and growth."

But in a sluggish climate, with fewer pitches than previous years, new business proved hard to come by. A series of new business wins for Quorn, Dow Chemical and Flight Centre UK, and retentions like Hertz, were viewed as positive rather than transformative, before drying up altogether towards the end of last year.

To his credit, Initiative also maintained a near 100% client retention rate during Altman’s tenure, with just the loss of London Zoo before Christmas 2012. But in a bigger picture scenario the agency suffered from not having the rub of the green in the battles where it mattered most. Too many of those time-sapping global pitches, from Home Depot to SAB Miller and Philips, ended in disappointment. Unilever’s planning duties were the notable exception.

After a trip to Silicon Valley in 2011, Altman had noted the one recurring theme evident in every company had been failure. "If you don't fail occasionally, then you're not trying hard enough," he concluded at the time, perhaps offering context he can seek solace in now. He is sure to re-emerge again when a suitable challenge presents itself.

The 'will they, won't they' speculation surrounding Tesco is also sure to continue. But, in truth, the latest evolution of Mediabrands is far bigger than Altman, Initiative or even the supermarket. The extension of IPG’s cluster structure echoes developments that have already played out in 10 of the G14 markets, including neighbours France, Germany and The Netherlands.

Since the inception of Mediabrands some six years ago, the aim has been to create a structure that can draw upon the scale and breadth of its capabilities, while creating a nimble, collaborative culture, often galvanised around one P&L.

For a global network competing against larger rivals in the forms of WPP, Omnicom and Publicis Groupe, the rationale makes sense. And as our interview with its new UK leader, Andy Jones, highlights this week, it’s a development that’s certainly been eagerly anticipated by some. 

This article was first published on campaignlive.co.uk

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