Steve Allan and Andy Troullides stand stiffly side by side under a
pint-sized palm tree. At first glance, you might think they were on
holiday together, except they are wearing suits - and anyway, a holiday
seems unlikely because the two men have work to do.
In reality, of course, this is no beach paradise. The palm tree stands
in the glitzy new atrium of an office complex in North Gower Street,
NW1.
But it is the start of an exciting journey for Allan and Troullides.
Until last week, they hardly knew each other. That didn’t matter. It
wouldn’t even have mattered if they had hated each other. But now their
ability to forge a strong relationship will be the key to their future
happiness, and to that of many others.
Last week, Grey Advertising’s European media dependant, MediaCom Europe,
acquired the outstanding shares of the 23-year-old Media Business for a
staggering pounds 28 million. (Negotiations began early in the year, but
were halted in October after scary fluctuations in the stock market.) In
the UK, that means MediaCom London will merge with the Media
Business.
Allan Rich, chairman and chief executive of TMBG, will become chairman
and chief executive of the new set-up, to be called MediaCom/TMBG.
Troullides, 41, and Allan, 35, managing directors of MediaCom and TMBG
respectively, become joint managing directors (Campaign, last week).
Mergers commonly involve substantial redundancy programmes but, Allan
insists, not this one. ’This is not a cost-cutting exercise. This is
part of an expansion and growth plan. Double the business means double
the people.’ But Troullides accepts that, inevitably, ’we can’t do this
without some personal disappointment’.
Which brings us to their own situation. How will they share the job of
managing director? Successful partnerships of this sort are few and far
between. But George Michaelides, the Michaelides & Bednash founding
partner who worked closely with Allan during the formation of the
Bullett media brand, believes the pair are compatible: ’Their
personalities would fit. They are not egotistical, hierarchical
personalities. It’s a very good marriage.’
Of the two, it’s Troullides who seems the less dominant. For starters,
he will move with the rest of MediaCom into TMBG’s offices. (This makes
sense, as MediaCom needed to move out of its offices north of Oxford
Street anyway and TMBG’s spacious offices are more modern). Having only
visited the offices twice before, Troullides had no idea where to find
the loo or the photocopier.
Then there’s the money. Rich and Allan have been made seriously rich by
the deal and could well afford to take a 10 per cent stake in MediaCom
Europe. Troullides, on the other hand, remains a mere employee. Will
this tip the balance of power in Allan’s favour?
Troullides is more tentative and self-deprecating. He bites his nails
continuously. Admittedly, Allan also has a neurotic side - several times
he describes being ’hurt’ in the past by press coverage - but ultimately
he’s slicker, more self-confident. (A few million in the bank probably
helps.)
With claimed billings of more than pounds 500 million, the new agency
would sit second in the league table, ahead of Carat, on recent
billings. However, the latest figures from MMS - those used by Campaign
- show the two agencies’ combined billings for the year ending September
1998 to be just pounds 333 million, which puts Media COm/TMBG in sixth
place. But even on those lower figures, the two have clearly propelled
themselves into the big league.
But why do the deal? Is it a defensive move, or a positive, expansionist
one? A ’grey merger of necessity,’ as one media owner puts it? Or a
’major step in an aggressive growth-plan to extend the global reach of
the MediaCom brand,’ as Ed Meyer, president and chief executive of Grey
Advertising, insists?
The fact is that both companies have reached a plateau. MediaCom, whose
clients include Procter & Gamble, Mars and Smith-Kline Beecham, has been
looking for a UK partner to add volume locally. Slipping down the league
tables, it currently stands just inside the top 15. And TMBG has had a
difficult year, losing more than pounds 50 million in billings and
putting on just pounds 12 million. It has fiercely loyal independent
clients like Direct Line and Book Club Associates. But without a global
network or experience with major fmcg clients, it was never going to get
work from the likes of P&G. The two were stuck in the dangerous middle
ground.
To some extent, Allan and Troullides accept this. ’We got to a stage as
a business where we’d reached the top ten,’ Allan says. ’We could stay
where we are or be more ambitious. Sometimes clients might invite the
top ten or the top five to pitch. We want to make sure we get invited to
the party. It would have been incredibly difficult to get there by
organic growth.’
MediaCom, too, needed the deal, Troullides says: ’Size is important. If
you aren’t big, that’s often used against you in pitch selections. If
you’re big you have no excuses.’
But why should clients use the newly enlarged agency? MediaCom barely
registers as a personality and TMBG has always seemed insular. Won’t the
MediaCom/TMBG merger offer more of the same, only bigger? Not
surprisingly, both men deny this. ’People see MediaCom as big and
professional,’ Troullides claims, ’We have lacked a little sparkle,
we’re not sexy, or flavour of the month. But I don’t mind that because
we are in the businesses of offering professional advice to
customers.’
’People say (TMBG) is inward-looking and entrepreneurial,’ Allan says.
’As an agency we have spent more time over the years talking to our
clients than to our peers.’
Well, that’s what they say. Media owners seem split on the deal. One TV
sales director is scathing: ’It won’t make any difference. There’s still
no clout there.’ But others are more generous. Andy Barnes, Channel 4’s
director of advertising, sales and marketing, argues that it’s
unnecessary for media shops to be ’punchy and lively and sparky’. And he
says it does make a difference ’if you double your size’.
Both men insist they can learn from each other. ’We’ve all come from a
different place,’ Troullides mumbles. ’I’ve been a hired gun, a manager
for Grey Inc. The merger was never one that I’ve resisted. What was on
my mind was to make us bigger, faster. What I get from it is to work
with Steve and Allan who, as commercial people, can teach me a lot. They
started from scratch; I started with a hundred million-plus of great
billings.
I have managed my business well, but I haven’t built from scratch or
found myself waking in the middle of the night worrying where money will
come from. I bring know-how about working with major blue-chip
multinationals.’
Allan insists he has much to learn from Troullides: ’One is learning how
to co-exist within a network. That is new for us. Secondly, if you look
at their client list, it’s very much large fmcg business. We openly
acknowledge that is the business we don’t have. We’re going to learn
more about managing that kind of business and about working on a global
platform.’
As for his 10 per cent stake in the new company, Allan insists it is for
the general good: ’It was important from Grey’s point of view, and
central from mine and Allan’s, to demonstrate to our people and clients
that we are committed. We’re not just taking money from the table and
walking away.’
At the moment it’s anyone’s guess how the two will work together. They
have little idea themselves. Troullides candidly admits: ’We’ve never
even had lunch together. I feel that is quite helpful. You don’t come
with preconceptions and baggage.’
Not baggage, perhaps, but luggage. Troullides may not be going on
holiday for a while, but he must pack up his things and bring them to
North Gower Street. Let’s hope he enjoys his stay.
