Feature

Media Headliner: Gerster says collaboration is a sign ofInitiative

The media network's chief executive is confident its tie-up with Draft is more than a token gesture from IPG.

Some take the view that the task of running Initiative, the Interpublic-owned media network, ranks somewhere between being an Iraqi policeman and Mel Gibson's agent on the scale of the world's least desirable jobs.

Alec Gerster, its current chief executive, is not among them. Despite the travails of his parent company, account losses in the US and Europe and remuneration scandals that saw Interpublic media networks returning money to key clients, Gerster is still content in the role.

Speaking from his midtown Manhattan office, shortly before heading to his family retreat in Vermont for the weekend, he says: "I've been lucky enough to have run the company for four-and-a-half years and have been responsible for delivering financial prudence. But there has also been a steady stream of technological innovation and the introduction of shared learning with Universal McCann."

The latest development in the evolution of Initiative is not, as some predicted, a merger with its sister media agency Universal, but a tie-up with IPG's recently created Draft FCB network. IPG has dismantled its IPG Media structure in favour of an arrangement that pushes greater collaboration between its media and creative companies. Explaining the decision, Michael Roth, IPG's chief executive, said: "Media is an increasingly strategic part of our overall offering and an important component of the creative product, yet most marketing services providers deliver an unbundled, often siloed, media product."

While cynics might suggest that IPG's decision to unpick its own group media offering smacks of a packaging of its businesses into neat bundles should the need for a sale arise, there does seem a clear rationale to the Draft/Initiative tie-up, which will see Gerster working closely with Draft FCB's chief executive, Howard Draft, and newly appointed vice-chairman, Bill Cella, on implementing a new structure and ways of co-operating. As IPG made clear last week, this will stop short of a full merger and will focus instead on the creation of new planning processes for clients. Gerster claims this is a natural evolution, both for him and for Initiative.

"I've always been very interested in Draft - we have a DRTV joint-venture with them in the US and I've always been very interested in the direct response space," he argues. "Draft has become a seriously focused media-neutral entity. It's all about who will get out of the 30-second trap and this is an environment where the last thing you need is arm-wrestling over who owns what. It's about collaboration."

Gerster is cagey about the details of the collaboration, or "alignment" as the IPG announcement describes it. He will only say that it will be tailored to each market and to the requirements of individual clients, with collaboration being greater in some markets than it will in others.

To some observers, it is a surprise that Gerster, now in his late 50s, is still there to oversee the partnership with Draft and to sit on IPG's newly created media council. But then it was a surprise when he left his role as the head of Grey's US media operations in 2002 to take on the Initiative task, and it has hardly been plain sailing for him since.

Having started at Grey in the early 70s, Gerster is known as one of the more thoughtful, considered leaders on the US media scene. His initial task at Initiative was to unify a diverse global company and introduce common principles across the business. The introduction of a new management team (including Starcom's Richard Beaven as the chief executive in North America, the European joint chief operating officers Jerry Hill and Dirk Wiedenmann, and the former Motorola client Janet Fitzpatrick as the chief strategic officer) followed.

Gerster is seen as open-minded and more of a "quiet man" than a bully. However, there are some who suggest that he has been too cautious and disengaged from the detail outside the US and that this has caused problems since the departure of his management partner, the worldwide chairman and European chief executive Marie-Jose Forissier, in 2005.

"He gets a nosebleed when he leaves America," one former Initiative executive says.

Critics of Initiative say that the network has suffered from a lack of entrepreneurial leadership at all levels and that it now needs to be prepared to take risks and to "throw money" at its problems. The input of Draft and Cella will undoubtedly provide some impetus and Gerster argues that his recently assembled management team can also deliver in this area.

Yet, despite Gerster's wish to evolve the business, Initiative's perceived lack of investment in digital is seen by some as a significant hindrance, and critics doubt the Draft deal will have an impact on a media network that bumps around the lower echelons of the top ten (Recma projects its 2006 billings will increase slightly to $12.25 billion, but that it will fall from eighth to ninth in the rankings).

Gerster says that IPG's commitment to invest in Initiative has never been an issue, but one source describes the Initiative/Draft announcement as the latest in a series of "fluffy platitudes" from IPG and says the tie-up with Draft, which could potentially deliver more in the digital and response space, has come too late because clients such as General Motors have already moved business to networks with stronger offerings in this area (namely Starcom and Carat).

However, Gerster is convinced that Initiative has made the right move at the right time. "If you look at the digital environment and the companies that are extracting value, they tend not to be digital only," he says. "It's not about digital taking over - it will interact and is intertwined with everything else."

But is Gerster committed to his own job and does he see himself there in the long term? "This (tie-up with Draft) is invigorating, different and compelling enough to see what we can do with it. It's a very good pairing that is highly relevant and we will be extending things from our relationship in the US."

INITIATIVE UNDER GERSTER
April 2002: Initiative hires Alec Gerster, the chief executive of MediaCom in New York, as its worldwide chief executive. He will work closely with Marie-Jose Forissier, the network's global chairman, on attempting to build the network

November 2004: Unilever moves its EUR1 billion pan-European media planning and buying account into MindShare. Initiative had previously handled the bulk of the business

March 2005: Forissier leaves Initiative as Interpublic begins a search for an executive to head a group media company. Two months later it hires Mark Rosenthal, the former MTV Networks chief operating officer, to build its group media offering, IPG Media

September 2005: Bank of America moves its $600 million account out of Initiative and into Omnicom's OMD

October 2005: IPG announces a plan to return up to $250 million to clients as part of a move towards greater transparency in its dealings. Initiative clients, including Tesco, are contacted as part of the process

October 2006: IPG announces it is to "align" Initiative with creative network Draft FCB as it ditches IPG Media.

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