Nobody's invincible, not even new-business machine McGarryBowen. After recent traces of vulnerability, can the two-time Ad Age Agency of the Year winner regain the momentum it has demonstrated over the past three years?
Only if it's careful.
McGarryBowen's uncanny ability to net one big account after another and forge deep relationships with senior marketers and CEOs has made it a formidable competitor and Ad Age 's Agency of the Year -- twice since 2010. But after two high-profile clients have all but walked out the door, rivals and industry observers are wondering whether the shop founded by John McGarry and Gordon Bowen can get its mojo back.
Last month beer giant AB-InBev yanked the Bud Light account it had handed McGarryBowen only eight months prior, and last week Ad Age reported that Burger King is adding shops to its roster, putting in peril the creative duties McGarryBown had acquired from the fast feeder just a year ago. Meanwhile, the agency is defending the account of longtime client Marriott. Obviously the intense growth in recent years -- the shop's U.S. revenue grew 47% to hit $165 million in 2001, the year prior it climbed 60% -- might not be able to be sustained forever. But how McGarryBowen handles a leveling off will impact the market's perception of the agency.
Experts say shops should focus on current clients and try to grow slowly and carefully; agencies should be realistic about how much new business they can reasonably take on and quit going after more while they're ahead.
One search consultant who didn't wish to be named suggested that rather than scrambling to replace Bud Light, McGarryBowen should retrench a bit. At such a stage, agencies should "put a moratorium on new business," the consultant said. "It makes sense to me that [McGarryBowen in] 2012 is not [winning business] at the same rate. They've been smart at being selective."
Indeed, while McGarryBowen has added some new accounts this year, the wins have been fewer and far between. The shop recently joined Procter & Gamble's roster and before that picked up the Cars.com account. Abroad, the new London office triumphed in a pitch for Honda.
In a statement to Ad Age , McGarryBowen's creative chief Gordon Bowen acknowledged, "The demands and turnarounds we face in our business today have never been greater."
He added, "Our clients feel it, we feel it, and I am proud that we continue to face these head-on in partnership with our clients to deliver breakthrough work that works. We do this all while continuing to grow our offering with new capabilities, new global offices, new people and of course new clients and brands.
"A strong roster benefits all our clients and as always we will remain focused first and foremost on helping to grow their businesses, while also selectively pursuing new opportunities," Mr. Bowen continued.
Another search consultant said it's too early to say that McGarryBowen is on the wane but offered that it could be experiencing a "course correction." The new path the company is on is decidedly global. Parent company Dentsu has made it the ambassador to new markets, rebranding its European operations with the McGarryBowen name, and soon the agency will also enter China. But given the U.S. is still the largest single market for advertisers, it's critical for McGarryBowen to balance global growth while maintaining a strong domestic business.
"I don't think anyone can afford to take their eye of the U.S. ball," said the second consultant. "It's one more reason why their management was stretched, not only with major new clients, but they're building their global empire out at the same time. No one can tell me that that doesn't pull management in a lot of different directions."
Over the boom years McGarryBowen faced criticism that it lacked the creative prowess of a Wieden & Kennedy or a Droga5, but this has been tempered by its reputation for being "a strong strategic agency," according to one consultant.
"McGarryBowen is known for less edgy work. … They have to dial up their creative," said another consultant, adding that it could be a problem that many industry observers don't recognize the agency's creatives beyond Gordon Bowen. "Where's their creative bench? We've got to know more people."
Concerning the agency's management, consultants also pointed out that since CEO John McGarry has shifted to a holding-company post at parent Dentsu, McGarryBowen should highlight other senior executives.
If anyone is bullish on the shop's prospects, it's Tim Andree, Dentsu Network's President and CEO, who is investing more in exporting the agency's brand around the globe. "We have an excellent management team in place at McGarryBowen and have supreme confidence in their capabilities and prospects," he said. "The agency has a clear strategy for growth, a strong new-business pipeline and continues to provide outstanding service to their clients.
"There is no doubt McGarryBowen will remain one of the strongest and most respected brands in the industry," Mr. Andree said.