Media-Buying, Planning Agencies Shake Up Top Executives

Why The Majority of Leaders in the Space Have Changed Chiefs in Recent Past

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NEW YORK (AdAge.com) -- Ten of the 14 major media-buying and selling agencies have installed new chiefs at the global or North America leadership levels in the past year and a half, creating a period of management flux that hasn't been seen since these firms were spun out a decade ago.

Of course, it makes sense that all this is happening now, because 2009 has been hammer time for media agencies. Major marketers have been launching procurement-driven reviews to lop off cost, pushing some agencies to drop fees, in some cases to nothing. And as they flirt with commoditization, there's more pressure on shops to recruit the kind of talent that create sophisticated strategies for marketers in a complex digital age.

Some agencies have looked to put more digital-savvy leaders in control. Others have used the recession to accelerate succession plans for old management. Still others have simply been looking to put some oomph into limp new-business operations.

Louis Jones, who was recently named CEO of North America for WPP's Maxus, replacing Carla Loffredo, now chief operating officer for Maxus North America, said that was a key consideration in his placement.

"We recognized a need to shift the gravity within the media department so that digital strategy sat more centrally within how we thought about everything," said Mr. Jones, who is also the first African-American to head a major media agency. "It was a move that the industry needs to take a bigger step towards by integrating online and offline and having a real sound repository of digital experience."

Less golf
What there's less room for is purely relationship-focused management arrangement based on secret handshakes, golf outings and the like.

"The cult of the individual is not as powerful as it used to be," said Martin Cass, who replaced Scott Sorokin as U.S. president of Aegis' Carat last October. "I get the sense that the marketplace is a lot less clubby and more democratic than it was."

Due to significantly slashed media budgets and fees, just about every other agency is down anywhere from low to high double digits in terms of revenue, according to industry insiders.

"It was an extremely challenging year for everybody and almost every agency is down in major numbers," said one media agency CEO. "It's bad everywhere and very few agencies will end the year with the same number of staff or more than they had last year."

With less time allotted to prove oneself, Lisa Donohue, who replaced John Muszynski as U.S. CEO of Publicis Groupe's Starcom USA about 100 days ago, said one needs to create impact that's not only positive, but immediate.

"Provide value from day one and advance the momentum from there," she said. "It's easier said than done of course, but I've wrapped my head around ways to do it like listening, acting decisively and with conviction and providing perspective and a clear point-of-view."

Leading by example
When asked by Dominic Proctor, Mindshare's global CEO, to fill the agency's top spot in North America after Scott Neslund stepped down, Phil Cowdell said he would only do it if he was able to remain true to his roots of being an "old-fashioned client man."

Mr. Cowdell doesn't believe the role of today's CEO is sitting in the office managing profits and losses and hiring. "That's not an efficient use of what I do," he said. He describes his philosophy on the role of today's media agency CEO -- being out front and solving client problems and having a point of view -- by quoting George Patton: "I have never seen men managed into battle. I've only seen them led."

Matt Seiler, who replaced Nick Brien as global CEO of Interpublic's Universal McCann in July 2008, said relationships will always be critical but it's the work that's really important. Universal McCann recently won the Charles Schwab business, an account Mr. Seiler had when he was at Omnicom's PHD, and was awarded, without a review, media duties for Applebee's, whose sibling company IHOP currently works with Universal McCann.

He said the implications of these personnel changes are beneficial to clients and the media industry, which is evolving faster than any other marketplace.

"To think the same people that were doing it well when it was simpler should or could be the same people doing it today is probably naïve," Mr. Seiler said. "You have to bring in different perspectives, and that's not a criticism of the people who were in leadership positions before. This is the natural evolution that must take place if you are going to think differently about how you manage your business and what services you provide for your clients."

Costly reviews
But personnel changes aren't the only things impacting client-agency relationships. The drawn-out, costly and sometimes pointless review process, has become more of an exercise in putting agencies through the ringer to squeeze them for every penny they can.

"These reviews certainly aren't making our lives any easier," said one media-agency president. But the executive said these procurement-driven pitches also have a negative domino effect felt throughout the agency world when competing agencies cut and slash fees to nearly zero to either hold on to or win a piece of business.

"The risk comes when people get desperate," the agency president said. "There will be a comeback and you'll find over the next year or so that people have done deals that are impossible to maintain."